Your credit score and credit report show how well you’ve managed borrowing money in the past. Lenders, landlords, and employers might review portions of your credit history when making decisions. So it’s important to confirm that your credit score and report accurately reflect your information. Learn how to check your credit score and report and get steps you can take to improve your credit.
How to check your credit score
You can check your credit score in several ways:
- Set up an account with the credit reporting agencies: Some may require you to sign up for a free subscription or pay a fee to access your score.
- Check with your credit card, bank, or lender: Financial institutions may give you your score for free as a customer benefit. This could be viewable on your online account or published directly on an account statement.
- Use a free credit scoring website: There are some online services that let you see your credit score for free. In exchange, they may pitch credit card and loan offers to you.
- See a nonprofit credit counselor: They may pull and discuss your scores for free during your initial consultation. (Find a reputable credit counseling program through the Department of Justice’s US Trustee program.)
Note that since there are 3 credit reporting agencies, you could have 3 different scores: They don’t always collect and use the same information.
How to check your credit report
Your credit report lists your credit history information. It includes your payments, current and past accounts, credit card and loan balances, and details related to financial issues like bankruptcy.
By law, you can get your credit report from each of the 3 credit reporting agencies every 12 months through AnnualCreditReport.com. You can currently access your reports for free once a week. To gain access to your reports, you need to verify your identity, which may include answering questions about your credit history.
What does a credit score mean?
Your credit score is a 3-digit number that ranges from 300 to 850, with 850 being the best possible score. Credit scores are generally calculated using information from the 3 credit reporting agencies: Equifax, Experian, and TransUnion. Having a credit score means you have a history of borrowing money, and the higher the number, the more reliable you may be at repaying those debts.
FICO and VantageScore are the 2 most popular companies for setting scores. Here are the categories they look at, though they weigh them differently and have slightly different takes on them.
Payment history: This accounts for whether you make loan and credit card payments on time. It’s the largest and most important factor in determining your credit score with both companies.
Length of credit history: This is how long you’ve had credit accounts. A longer credit history may demonstrate a stronger borrowing track record.
Credit mix: The types of credit you have also matter. Generally, it’s better for your score to have a mix of accounts, like a mortgage, car loan, and credit card, as opposed to just one type of credit.
Total credit usage: Also called your credit utilization rate, this is the percentage of your available credit you’re using. Ideally, your rate should be below 30% of your total available credit.1 That means someone with a credit card limit of $10,000 should try to keep their monthly balance below $3,000. The closer you are to maxing out your credit, generally the worse it is for your score.
New credit: This looks at whether you’ve applied for any credit cards or loans recently. Newer applications could lower your score in this category.
Balances/amount owed: This is how much credit has been extended to you that you haven’t yet paid off. Though you might not always be able to, consistently paying off what you owe as soon as the bill comes due may potentially improve your credit score.
Available credit: This is how much credit you have across all your accounts.
Learn more about how FICO and VantageScore calculate credit scores.
What is a credit score used for?
Credit scores are used for determining how likely you are to pay back money you’ve borrowed. Lenders check your credit report and score when you apply for a mortgage, car loan, credit card, or other type of credit. If you have a high score, you’re generally more likely to qualify for better terms at a lower interest rate. If you have a low score, the lender could charge you a higher interest rate since there’s a higher perceived risk that you might miss payments based on your history. A lender could also choose to deny your loan application altogether due to a low score.
Landlords also typically check your credit score before allowing you to rent a property. Utility companies and cell phone companies could consider this information too before giving you a contract for their services. Even employers sometimes check credit scores for hiring decisions and promotions, especially for jobs involving sensitive information that could be the target of fraud or theft.
Considering how many decisions depend on your credit score, it’s important to check it regularly and work to improve your credit score.
Does checking your credit score lower it?
Checking your own credit score doesn’t lower it. You can check your credit score as many times as you want without negatively affecting it—this is known as a “soft inquiry.” An employer pulling your credit history for a background check also won’t lower your score.
When lenders check your credit history, though, it could temporarily lower your score by a small amount. This is known as a “hard inquiry.” Multiple hard inquiries for the same type of loan within a short amount of time, like a month, could count as just one hard inquiry. This could benefit you if you’re shopping around for the best loan terms and multiple companies are checking your credit at once.
How to raise your credit score
Raising your credit score can take time and careful budgeting, but these steps may help improve your number—and your potential options for loans, rentals, and jobs.
Always make minimum monthly payments. Making minimum credit card and loan payments on time can steadily raise your score. Missing a payment, on the other hand, could hurt your score.
Pay down your credit balances. Your score could drop if your credit lines are close to being maxed out, so keep an eye on statements. Again, try to keep your utilization under 30%.
Ask for a credit limit increase. You could consider asking for a credit limit increase on one or more of your credit cards to help improve your utilization rate. If your credit limit increases but your balance stays the same, your utilization rate goes down, which could make your credit score go up.
Think twice before closing old accounts. Since part of your score depends on your accounts’ ages, it helps to keep old accounts active even if you never use them. Still, you might want to consider closing a card with a high yearly fee, for example, if you’re not using it.
Avoid opening too many new accounts. Applying for new lines of credit could lower your score. Try not to overdo it, especially when you’re planning to apply for a big loan like a mortgage soon.
Check your credit report for mistakes. If there’s something inaccurate on yours, like a missed payment you actually made, it could be unfairly dragging down your score. Also check your report for signs of identity theft, like a credit card under your name you didn’t open. Contact the credit reporting agencies to address these issues and potentially improve your score.