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.
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.
“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 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.
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.
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.
A credit score is your credit history expressed as a number. You can also think of it as a grade for how responsibly you’ve managed loans, lines of credit and other financial obligations over the years.
Free credit reports are available from several sources, including WalletHub, which is the first and only website to offer free credit reports and scores that are updated on a daily basis. WalletHub also provides an early-warning system for credit-report changes in the form of 24/7 credit monitoring, plus customized guidance to help you save more money. All you have to do is sign up (it’s 100% free).
But WalletHub isn’t the only place you can get a free credit report. The most important alternative is AnnualCreditReport.com, the government-sponsored site where we all can get a copy of each of our three major credit reports every 12 months. While WalletHub provides unlimited access to your full TransUnion credit report, updated daily, you can use AnnualCreditReport.com to review your other two reports from Experian and Equifax. But don’t check both at the same time. Review one of them now, and save the other one for later — say, six months from now. Pulling your Experian and Equifax reports in six-month rotations will help you ensure you’re not missing anything for an extended period of time. Just bear in mind that using only AnnualCreditReport.com would be a mistake, as it would blind you to credit-report changes for much of the year.
A bad credit score is a credit score from 300 to 619, or 639, depending on whom you ask. There’s no universal definition for bad credit for the same reasons there’s no single “real” credit score: Many ways to measure credit exist, and a lot depends on the lender. That said, you probably have a bad credit score if you’ve declared bankruptcy in the last three years or fallen at least 60 days behind on a bill payment in the last nine months. Your odds of having bad credit are also high if you currently have a past-due credit card or loan bill, or your credit cards are maxed out. And no matter what you call it or where you draw the upper limit, you don’t want to be anywhere close to the bad credit section of the credit score range – at least not for long. Not only will a bad credit score make it harder and more expensive to get a loan, but it could also complicate your living situation and even your job options. Fortunately, a bad credit score is not a life sentence. You should be able to go from bad credit to fair credit in 12-18 months, if you’re careful.
Exactly how you should go about repairing your credit and how long that will take depend on how badly damaged your credit is in the first place. So your first order of business should be to check your latest credit score and see where you’re starting from. You can do that for free on WalletHub and get personalized credit improvement advice in the process.
Credit-report errors are all too common. The Federal Trade Commission estimates that roughly one in four consumers have an inaccurate credit report. And it can take only one error for a lender, landlord or other credit checker to decide you can’t be trusted to meet your financial obligations.
That is why it’s important to review your credit report on a regular basis and dispute any errors. You can check your latest TransUnion credit report for free on WalletHub. And if you find an error, you can file a dispute with TransUnion directly from your WalletHub account.
There are many ways to improve your credit score. They range from paying down debts and reducing your credit utilization to simply making on-time bill payments each month. But you can remove guesswork from the equation by signing up for a free WalletHub account. We’ll tell you exactly how to improve your credit score and even how long it will take, as part of your Credit Analysis.
Credit improvement isn’t complicated, fortunately enough. Credit scores rise and fall based on the information in your major credit reports. The more positive info and the fewer negative records they contain, the better your credit score will be. That’s why it’s so important to understand what goes into your credit score. And it’s why you don’t need to get fancy to improve your credit score.
It’s possible to improve your credit score in a matter of weeks. For example, you could successfully dispute errors on your credit report, pay down credit card debt, or pay off collections accounts. Each of those steps could remove negative information from your credit report or add some positive info, either of which may benefit your credit score. Simply paying your monthly bills on time will help, too, though a single on-time payment probably won’t improve your score very much. You need to consistently pay on time.
It generally takes at least a year to rebuild bad credit, which is usually defined as a credit score below 620. But how long it takes to repair credit score damage really depends on how bad it is and where you expect your score to be once fully rebuilt. Below, we’ll give you an idea of how long you can expect to wait in various situations, as well as what you can do to speed things up.
The most popular credit scores all use a range of 300 to 850. So a credit score of 900 isn’t possible with those models, which include VantageScore 3.0 and 4.0 as well as FICO 8 and 9. But some older models, as well as some alternative scores, do go up to 900 (or even beyond). It’s good to be familiar with these ratings, but you probably won’t encounter them often.