You can check your credit score for free in less than two minutes on WalletHub, the only site with free daily updates. Just quickly confirm your identity, and you’ll get access to your latest VantageScore 3.0 credit score, based on your TransUnion credit report.
A fair credit score is usually defined as any score in the range of 620-659. Roughly 13.5% of people have fair credit, according to WalletHub data. The average person with fair credit is 47 years old and has an annual income of $54,000 per year.
The highest credit score you can have is 850. That’s the maximum credit score used by all of the most popular credit-scoring models today. While less than 1% of people have that highest possible credit score, according to score providers, far more of us can claim to have perfect credit.
Once you get a credit card, you can build credit by using it every month, paying off your purchases on time and keeping a low credit utilization (less than 30%). But there are many ways to build credit with a credit card other than making purchases and payments. For instance, you could lock your credit card in a drawer, and your score would still improve.
Everyone knows you need auto insurance to drive. It’s the law, everywhere but New Hampshire. We also know that our credit scores dictate what types of credit cards and loans we can get. But most of us are in the dark about to the connection between credit scores and car insurance.
So WalletHub set out to see just how much credit data affects the cost of insurance policies in each of the 50 states and the District of Columbia.
In order to build a good credit score, you must first establish credit. Establishing credit means beginning your credit history by obtaining a loan or line of credit. That’s all you need to get your first credit report and score. And it’s the first step toward one day qualifying for a decent mortgage, car loan, etc.
The Myth: Many people assume we each have three, and only three, credit scores, one from each major credit bureau: TransUnion, Experian and Equifax. After all, anyone with a Social Security number who’s ever possessed either a credit card or a loan also has a credit report from each of these bureaus. So it would seem only logical for there to be three corresponding credit scores. But that, as it turns out, isn’t true.
Numerous websites, including CreditBoards.com, operate so-called credit-pulls databases. These forums include crowdsourced information about which credit bureaus different issuers check when evaluating applications, what credit scores are needed to obtain various credit cards and the spending limits people are approved for.
“Credit pulls” are the same thing as “credit inquiries” and “credit checks.” All of these terms refer to the act of checking a credit report. You can pull your own credit report, for example. As can a lender, employer, landlord or insurance company, under the right circumstances.
The terms “credit report” and “credit score” are often mentioned together, and for good reason. But they’re not quite the same thing. A credit report is a summary of your track record as a borrower. It lists the loans and lines of credit that you’ve used, any collections accounts or tax liens in your name, personally identifying information, and other key info. A credit score is basically a credit report’s contents expressed as a number. In other words, it’s shorthand for what your credit history says about how risky it would be lend money to you.
A D&B Rating is a type of credit score used to evaluate the creditworthiness of small businesses. D&B, short for Dun & Bradstreet, is one of three major small-business credit reporting agencies, the others being Equifax and Experian. Business credit scores are not as familiar as personal credit scores. But they’re worth looking into if you own a business, whether it’s to assess your own company’s status or to check up on a potential business partner or borrower.
An , or a credit-based insurance score, is similar to a credit score. The main difference is that your auto insurance score predicts your likelihood of filing a claim as opposed to your odds of defaulting on a loan or line of credit. By analyzing years of data on credit scores and car accidents, insurers have found certain connections between financial misbehavior and motorist mistakes. In other words, people who are less responsible with credit are also more likely to have accidents. And insurance companies consider such behavioral patterns when pricing their policies.
A soft credit check is the type of credit inquiry, or credit pull, that does not hurt your credit score. Soft credit checks happen when you check your own credit report, for example, as well as when credit card companies pre-screen you for offers. In contrast, hard credit checks can lead to credit score damage, especially when you have many in a short period of time. Hard inquiries happen whenever you apply for a new loan or line of credit.
Credit scores have many enemies — from late payments and collections accounts to tax liens and court judgments. Each takes a toll on your credit standing to varying degrees. And the damage unfortunately comes far faster than any resulting recovery.
Below, you can learn more about what having good credit really means, why it matters, how much money it saves you and more. Just remember that individual lenders have the final say on whether a credit score is good, or at least good enough for approval. So there isn’t one standard definition.
Bad credit is not a life sentence, which is good news for the roughly one-third of people with credit scores below 620. So if your credit is damaged, there are indeed steps that you can take to rebuild. After all, rebuilding credit is a process that takes time and requires focus on the fundamentals. And we’ll explain exactly what you need to do below.
What you don’t want to do, however, is pay for credit repair. Anyone who claims the ability to “fix” or “clean up” your credit for a fee is scamming you. There is nothing any purported credit “repair” service can do that you cannot do yourself for free.
Credit inquiries, which are also known as credit “checks” or ”pulls,” are basically records of someone checking your credit report. But not all credit inquiries are the same. There are two different types: hard inquiries and soft inquiries.
Building credit from scratch doesn’t have to be difficult. The best way to build credit is to open a credit card, preferably one with no annual fee, and use it responsibly. That means paying your bill on time every month or simply locking it in a drawer. Just having an open line of credit that is in good standing will help you build credit.
A “credit reference” is a document that attests to the creditworthiness of a prospective borrower or rental applicant. The most common type of credit reference is a credit report, as it chronicles an individual’s or business’s credit history. And the most notable credit reports are those from TransUnion, Equifax and Experian. You can check your TransUnion credit report for free on WalletHub.
It doesn’t take long to build credit, at least in the sense of building enough credit history for a credit score to be generated. The newest credit scores can produce a rating for anyone with a loan or line of credit. That includes the VantageScore 3.0 credit scores you can get for free from WalletHub. And since creditors report account information to the major credit bureaus on a monthly basis, you can build a credit score in as little as a month.