Your credit can impact everything from your bills to your car loan to your ability to land the apartment of your dreams, so you should probably know what your credit looks like. If you’re not sure how to go about getting a copy of your score or report, we’ve got you covered.
Like it or not, credit matters . It’s also complicated. In our “Everything You Need to Know About Credit” series, we’re breaking down the basics.
Let’s get one thing out of the way: your credit report and credit score are not the same thing.
Your report is a history of all of your credit accounts, from bank credit cards to student loans to that NY & Co. card you opened when you got your first “real” job out of college and wanted some cute basics.
When a lender, landlord, or mortgage company pulls a copy of your report, they see this history, which also tells them if you defaulted on a loan, paid a card late, or paid everything on time every month.
Your score, on the other hand, is just a snapshot of that report. It’s like a grade. If your report looks good, you’ll have a good “grade”—maybe 740 or higher. If your report is bad, you’ll have a poor “grade”—probably something like 550. Your score is an indicator of what really matters: your past and present relationship with credit.
When a scoring company, like FICO, calculates your score, they look at different parts of your report to come up with this number. We tend to obsess over credit scores because they’re so easy to understand: 800 good. 500 bad. But as Investopedia explains, it’s your report that really matters.
“Even though you may hear more about your FICO credit score, your consumer credit report is a more nuanced, complete and significant part of your financial identity. Your credit report matters more to most lenders, and it should probably matter more to you...The information that is submitted to the credit bureau and appears on your credit report is the basis for determining your credit score.”
Yes, companies can use your score to gauge your creditworthiness or decide to lease you an apartment. And yes, they might make overall decisions based on that number. But here’s the thing: if your report is good, your score should be good. (Also, when a credit card company or landlord pulls your credit report, it does not automatically come with a score. They have to request that separately.)
There is a huge amount of attention on credit scores lately and how to hack them, and while it is possible to “hack” your score and make it go up, it’s sort of like addressing the symptoms of a problem rather than the problem itself . Many companies will have you open a slew of credit cards to “boost” your score without considering the impact that might have on your spending habits.
Don’t get me wrong, your credit score matters, but it’s more important to get a clear idea of what your credit actually looks like, and that’s what your report is for. Thankfully, it’s easy and free to do this!
You are entitled to a free copy of your credit report from each of the three major bureaus, Experian, Equifax, and TransUnion, every year. The official and easiest way to do this is at AnnualCreditReport.com. You’ll enter some personal details and get a breakdown of everything: your car loan, any medical debt, old credit cards you’ve forgotten about.
Your credit reports from each bureau will all look a little different because, well, those three companies are all separate from each other. They do things their own way. Plus, there are no federal requirements forcing companies to report to all three bureaus, so some might have information that others don’t. (Which is why it’s important to get a copy of your report from each of the three companies every year ).
That said, the information on your report is organized in a really similar way. If it’s your first time reading a report, it’s probably daunting.
Most of the info on your report is grouped into four main categories. They might be named something slightly different, but those categories are:
Your Personal Information is pretty obvious: your name, any aliases you’ve used, your Social Security number, addresses, and so on. Your Public Record Information will include any legal issues like bankruptcies, liens, wage garnishments, and judgments (although there have recently been some changes to reporting tax liens , we’ll get to that later). According to CreditCards.com, if you’re looking at a TransUnion report, you’ll also see an estimated date of removal for each item.
Creditor Information is the meat of your report and includes all of your existing lines of credit. Did you neglect a debt and it was turned over to a collections agency? That info will be included, too. Each line of credit will include some basic details:
If you have any accounts that could hurt your credit, they’ll be in their own section entirely, usually called “adverse accounts” or “potentially negative items.” If you have an account in this section, you might have a late payment, an outstanding balance, or the account may have been sent to collections. Even if you’re up-to-date on your payments for that account, it could still be in this section, haunting you.
And then there are Credit Inquiries. In this section, you’ll find any people or businesses who have pulled and reviewed your credit report. It might be a mortgage lender if you’re applying for a home loan, or a retail store, if you applied for a credit card with them. These are called “hard pulls” or “hard inquiries,” and if you have too many at once, sometimes it can ding your score, but the ding is temporary.
There are also “soft pulls.” This is when you pull your own credit report or a credit card company “pre-approves” you for a card. Soft pulls don’t affect your credit.
You might see some seemingly random “codes” on your credit report that don’t make any sense. Here are some of the most common codes and what they mean, according to Bankitis:
If you think your report contains an error, or worse, fraud, file a dispute. This is why it’s crucial to check your report every year. If you see an account that’s been open and you know for sure you never opened it, that could be a red flag for identity theft.
Each credit reporting agency allows you to file a dispute online. According to Bankrate, When you order your report, TransUnion and Equifax offer a mail-in dispute form, and Experian offers this on the last page of the consumer’s Experian credit report. You can also mail it into Equifax and TransUnion:
P.O. Box 740256
Atlanta, GA 30374-0256
2 Baldwin Place, P.O. BOX 1000
Chester, PA 19022
Even when you’ve reviewed your report and know where you stand, checking your score can be interesting (and kind of fun if you’re a money nerd).
Keep in mind, though, you don’t just have one credit score . You have hundreds of them because there isn’t just one credit scoring company. Plus, different companies use different scoring models depending on what kind of loan you’re taking out. Your mortgage lender might have their own model!
Different scores have different ranges, too. Some go up to 850; others go up to 990 or higher. So when you say “My credit score is 800,” technically, that doesn’t really mean much unless you know what score you’re talking about.
That said, when most people talk credit scores, they’re talking about your General FICO score, the one that ranges from 300 and 850. That’s the one lenders are most likely to use, according to LearnVest. And here’s what the numbers mean:
If you check your score at two different places and it varies wildly, first look into what kind of score it is (it might be a VantageScore, which is a totally different scoring company, although their ranges are similar) and then research the range they use.
In general, though, your scores should be pretty similar. If they vary, it could be a different calculation or different information that’s reported to the bureau they pull from. I hate to sound like a broken record, but this is why it’s crucial to check your report: if there’s a problem somewhere, your report will reflect this. Your score is just a number.
So how do you go about getting a copy of your score in the first place? It’s easier than ever, which is probably why people are obsessed with their scores now. Chances are, your bank offers a free glimpse at your score every month. Here are a few banks or credit card companies that do:
If your bank doesn’t offer this, or you just want to see another score, there are so many online tools that let you do this for free:
With all of these places, you do have to fork over your personal information so they can pull your data. Another word of caution: there are a lot of “free credit score” scams out there that trick you into a monthly subscription service (shakes fist at FreeCreditReport.com). Watch out for these red flags:
The FTC has some additional detail about credit repair scams here. While some credit repair companies are legit (they usually just look at your report for errors), many scams abound. If a credit repair company promises to boost your score by 100 immediately, for example, steer clear.
Okay, so we’ve detailed what “good” and “bad” means in terms of your score, but what does that actually mean in the real world? As one reader asked:
I’vealready ranted about how improving your credit is more about making sure it doesn’t suck, but to recap: you don’t need excellent credit, you just need to be good enough. And I say this as someone with excellent credit. It hasn’t done much more for me than having good credit has. When I bought a house, they deferred to my husband’s credit, which was good, but not excellent. When he decided to lease a car, I asked if my excellent credit could getus a better deal, and the salesman chuckled and actually said, “it doesn’t really matter.”
Here’s how Forbes contributor Adam Levin puts it:
The idea of “gaming” your already-excellent credit score to drive it up is not going to benefit you in any real substantive way – there’s little or no difference between the interest rates or credit terms offered to people with an 800 and those offered to people with the elusive 850. So gaming it doesn’t help anything but your ego.
In other words, as long as your credit isn’t terrible, you’re going to get the same level of perks at “good” as you will at “excellent.” Having good credit is more about not having bad credit so you can:
Finally, we’d be remiss to not point out the recent changes with the credit scoring industry.
Equifax, Experian, and TransUnion recently decided to change their standards for reporting tax lien and civil judgment data on credit reports. If the data doesn’t include a complete list of the person’s name, address, social security number, or date of birth, it won’t be included. This is significant, because like other negative items, paid tax liens stay on a person’s report for seven years.
There are also changes to how medical debt is reported. Effective September, the three bureaus will allow a 180-day “cooling off period” before any medical debt goes on a credit report. Medical debt is often reported before insurance companies even had time to pay them off, which makes it look like customers were delinquent when they weren’t. The new rule gives consumers or insurers enough time to pay these bills before they go to collections. The bureaus will also remove medical debts that are paid by insurers after the 180th day.
There are also some changes coming to VantageScore, a scoring model that’s not quite as widespread as FICO but still widely used. USA Today reports:
Using what’s known as trended data is the biggest change. The phrase means credit scores will take into account the trajectory of a borrower’s debts on a month-to-month basis. So a person who is paying down debt is now likely to be scored better than a person who is making minimum monthly payments but has been slowly accumulating credit card debt.
The new score will also ding you for having “excessively large” credit card limits, which could be bad news for people with old, unused credit cards that are still open or people who like to open credit cards for the rewards. Those changes are expected to be implemented this fall. The change could mean that many of the tricks and hacks we use to boost our scores could backfire, once again highlighting the importance of your report over your score.