Understand your credit score
Banks, credit card companies and
other businesses use credit scores
to estimate how likely you are to
pay back money you borrow.
A higher score makes it easier to qualify for a
loan and lower interest rates. Many scores range
from 300 to 850, but different companies use
different ranges.
You have many credit scores
You can have more than one score, because: Several variables affect your credit score, including:
§ Lenders use different scores for different products § How many credit accounts you have
§ How long you’ve had those accounts
§ There are many different credit scoring formulas
§ How close you are to your credit limit
§ Information can come from different credit
§ How often your payments have been late
reporting sources
§ Other factors
For example, a credit card score could be different
from a home loan score, and any scores you purchase How to raise your score
online could be different from both of those.
§ Paying your bills on time, every time has the
For some people, these differences aren’t that big. greatest impact on your score. One way to
But because lenders use different scores, you might make sure your payments are on time is to set
qualify for lower rates with one lender and not up automatic payments, or set up electronic
another. It can pay to shop around. reminders. If you have missed payments, get
current and stay current.
§ Don’t get close to your credit limit. Credit
Where do credit scores come from?
scoring models look at how close you are to
Your credit scores are generally based on being “maxed out,” so try to keep your balances
information in your credit reports. This information low in proportion to your overall credit limit.
is reported by your lenders to credit reporting Experts advise keeping your use of credit at no
companies. The three biggest are Equifax, Experian, more than 30 percent of your total credit limit.
and TransUnion.
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Protection Bureau Learn more at consumerfinance.gov 1 of 2
§ A long credit history helps your score. Credit § Reports saying you paid late when you paid
scores are based on experience over time. Your on time
score improves the longer you have credit, open § Accounts you closed that are listed as open
different types of accounts, and pay back what
you owe on time. § The same item showing up more than once (like
an unpaid debt)
§ Be careful closing accounts. If you close some
credit card accounts and put most or all of
How to fix mistakes
your credit card balances onto one card, it may
hurt your credit score if you are using a high If you find something wrong in your credit report,
percentage of your total credit limit. Frequently you may contact both the credit reporting company
opening accounts and transferring balances can and the company that provided the information (for
hurt your score too. example, your credit card company). Explain what you
think is wrong and why. Include copies of documents
§ Only apply for credit you need. Credit scores
that support your dispute. Your credit reports come
look at your recent credit activity as an indicator
with instructions on how to dispute mistakes.
of your need for credit. If you apply for a lot
of credit over a short period of time, it may
appear that your money situation has changed
for the worse. About us
The Consumer Financial Protection Bureau
Your credit report matters as much regulates the offering and provision of
as your score consumer financial products and services
under the federal consumer financial laws,
Mistakes in your credit reports could hurt
and educates and empowers consumers to
your credit history and credit score, so check
make better informed financial decisions.
them regularly.
Learn more at consumerfinance.gov
You can get one free credit report from each of
the big three credit reporting companies every 12
months. Go to annualcreditreport.com or call Connect with us
877-322-8228. In addition, Equifax offers six free
credit reports every 12 months, until December 31,
Submit a complaint
consumerfinance.gov/complaint
2026. When you visit the site, you may see steps to
view more frequently updated reports online. This
gives you a greater ability to monitor changes in
Tell your story
consumerfinance.gov/your-story
your credit.
Get answers to money questions
When you get your report, look for: consumerfinan ce.gov/askcfpb
§ Mistakes in your name, phone number,
or address Share your thoughts
facebook.com/cfpb
§ Loans, credit cards, or other accounts that are twitter.com/cfpb
not yours
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Protection Bureau Learn more at consumerfinance.gov 2 of 2
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