What is credit?
Credit is your ability to acquire goods or services before payment. Credit is granted based on trust that the payment will be made in the future.
What is a credit score?
A credit score is a decision-making tool that lenders use to determine how likely you are to repay your loan on time. FICO scores and scores by VantageScore are two of the most common types of credit scores.
What is a good credit score?
FICO scores range from 300 to 850. A FICO score of 670 or above is generally considered good; 740 or above is considered very good; 800 or above is considered exceptional.
Scores by VantageScore also range from 300 to 850. A VantageScore above 700 is considered good, while a score above 750 is considered excellent.
How to establish good credit
- Open a checking and savings account
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Make payments on time
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Check your credit report annually
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Start with only one credit card
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Pay outstanding balances
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Use only a small amount of the credit available
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Let your accounts age (the longer you've had credit, the better it is for your credit score).
What is a credit report?
A credit report details your credit history. It includes your loan paying history and the status of your credit accounts.
Reasons to check credit report
- It's free
- It's often the first indicator that you're an identity theft victim
- It's an important step in rebuilding and maintaining good credit
- It can help you detect and dispute errors
Note: your credit report will not show you your credit score. To view your credit score, you can check your credit card or other loan statement.
Where to access credit report
There are three nationwide credit bureaus that provide you with a free credit report, upon request, every 12 months:
- Equifax
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Experian
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TransUnion
You can visit https://www.annualcreditreport.com/index.action to request your free report.