What Is a Credit Score and How Is It Calculated? (2026)

Last reviewed: October 1, 2026

This guide explains what a credit score is, who uses it, how it is calculated, what does and does not count, how long mistakes follow you, how to check your reports and scores for free, how to fix errors and how to build credit from nothing. It draws on the Consumer Financial Protection Bureau (CFPB), the Federal Trade Commission (FTC), USA.gov, FICO's consumer site myFICO, the credit bureaus' education pages, the UK Information Commissioner's Office (ICO) and the Financial Consumer Agency of Canada (FCAC). We do not recommend any product or company.

This article is general information, not financial advice.

What a credit score is and who uses it

A credit score is a number that predicts your credit behavior. The CFPB defines it as a prediction of how likely you are to pay a loan back on time, based on information from your credit reports. A higher number signals lower risk to a lender.

The score is produced by a mathematical formula called a scoring model. A company takes the data in one of your credit reports, runs it through the model and gets a number. Nobody judges you personally.

Who uses credit scores

According to the CFPB, companies use credit scores to decide whether to offer you a mortgage, a credit card, an auto loan or another credit product, and to set your interest rate and credit limit. Scores are also used in tenant screening and insurance. The CFPB and USA.gov list a wider group that may look at your credit report:

• Lenders and card issuers, to decide on loans, limits and rates.
• Insurance companies, to evaluate risk where the law allows it.
• Landlords, to screen rental applicants.
• Utility and telecommunications providers.
• Employers, who may review a credit report with your consent.

A score is not the whole decision. FICO notes that lenders may also look at things outside the score, such as your income and how long you have been in your job.

Why you have many scores, not one

The CFPB is direct: you do not have just one credit score. Your scores differ because of:

• The scoring model. FICO and VantageScore are separate companies with separate formulas.
• The version. Each company has released several versions, and lenders do not all use the same one. The CFPB notes that certain FICO versions are used by Fannie Mae and Freddie Mac in home lending. FICO also publishes industry-specific versions for auto lenders and card issuers.
• The data source. There are three nationwide credit bureaus: Equifax, Experian and TransUnion. Creditors are not required to report to all three, so the files often differ.
• The date. Your report changes as lenders send updates.

This is why the number in your banking app rarely matches the number a lender quotes. Neither is wrong. They are different snapshots.

Credit report vs credit score

A credit report is the record; a credit score is a grade calculated from that record. If the report is wrong, the score will be wrong too, which is why checking the report matters more than watching the number.

The CFPB describes a credit report as a statement with information about your credit activity and current credit situation. It normally includes:

• Personal identifiers: names, current and former addresses, date of birth, Social Security number and phone numbers.
• Credit accounts: the type of account, dates opened and closed, the limit or loan amount, the balance and the payment history.
• Delinquencies and collection accounts.
• Public records, such as bankruptcies.
• Inquiries: companies that have accessed your report.

USA.gov adds a point that surprises many people: your credit report usually does not include your credit score.

Credit bureaus do not investigate you. They store what creditors, called furnishers, send them. The Fair Credit Reporting Act (FCRA) requires the bureaus to keep that information accurate, as the FTC explains, and gives you the right to see it and challenge it.

Credit score ranges: what counts as good

On the standard 300 to 850 scale, FICO says a score of 670 or higher is generally considered good, 740 or higher is very good and 800 or higher is exceptional. Lenders set their own cut-offs, so these bands are a guide, not a rule.

VantageScore uses the same 300 to 850 range and groups scores into poor, fair, good and excellent tiers. According to Experian's explanation of the model, a VantageScore of 661 or higher falls in the good tier. Do not compare a number from one model with a band from the other.

Two practical tips. First, look at the reasons shown with your score, not just the number; they tell you what to fix. Second, do not chase a perfect score. Once you are inside a lender's best pricing tier, extra points usually change nothing.

FICO vs VantageScore

FICO and VantageScore are the two main credit scoring brands in the US. Both use a 300 to 850 range and both read the same credit reports, but they weigh the data differently and have different rules about who can be scored.

FICO Score

FICO introduced its scores more than three decades ago to give lenders a common standard. myFICO states that FICO Scores are used by 90% of top lenders. The score is calculated only from your credit report, in five categories with published weights: payment history 35%, amounts owed 30%, length of credit history 15%, new credit 10% and credit mix 10%.

FICO adds a caveat: the percentages describe the general population, and for a particular person the importance of each category can be different.

To have a FICO Score at all, myFICO says your report must show at least one account that has been open for six months or more, at least one account reported to the bureau within the past six months, and no indication that the person is deceased. One account can satisfy both of the first two conditions.

VantageScore

VantageScore was created in 2006 as a joint venture of Experian, Equifax and TransUnion. Experian's overview lists VantageScore 3.0 (2013) and VantageScore 4.0 (2017), which uses trended data showing how your balances have moved over the previous 24 months, plus newer releases that are not yet widely used.

For VantageScore 4.0, factors are described by influence:

• Payment history: extremely influential.
• Total credit usage: highly influential.
• Credit mix and experience: highly influential.
• New accounts opened: moderately influential.

The biggest practical difference is eligibility. Experian notes that VantageScore can score you if your report has a credit account, a bankruptcy filing or a collection account, with no minimum period of activity. A person with a brand-new first card may see a VantageScore months before a FICO Score exists.

Which should you watch? Either. Both reward on-time payments and low balances above everything else. If you are about to apply for a specific loan, ask the lender which score it uses.

The five FICO factors in detail

A FICO Score is built from five categories of information in your credit report. The first two, payment history and amounts owed, make up 65% of the score, so they are where almost all meaningful improvement comes from.

1. Payment history (35%)

Payment history is the most important factor. myFICO explains that it covers credit cards, retail accounts, installment loans, finance company accounts and mortgages. The model looks at how many accounts are paid as agreed, how many past-due items appear, how overdue they are or were, how recent they are, and serious events such as collections and bankruptcy.

Three details are worth knowing:

• A payment is normally reported late only after 30 days. Experian explains that creditors do not report late payments until an account is at least 30 days past due. Miss the date by a few days and you may owe a late fee, but your report is usually untouched. After that, lateness is reported at 60 and 90 days, and score drops can grow.
• One slip is not fatal. myFICO says a few late payments are not an automatic "score-killer," and a good overall history can outweigh one or two.
• Time heals. In FICO's words, the older a credit problem, the less it counts. Bringing an account current also stops new late marks being added.

2. Amounts owed (30%)

This category is about how heavily you use credit, not simply how much debt you have. myFICO lists five things it considers:

• the amount owed on all accounts. Even if you pay in full every month, the report usually shows your last statement balance;
• the amount owed on different types of accounts;
• how many accounts carry balances;
• the credit utilization ratio on revolving accounts, meaning the percentage of your available credit in use; and
• how much of an installment loan is still owed compared with the original amount.

Credit utilization is the part you can change fastest. Add up your card balances, divide by your total card limits and multiply by 100. A balance of 1,000 on limits of 5,000 is 20%.

FICO does not publish a magic threshold; it says only that low utilization has a more positive effect. The CFPB offers a rule of thumb: keep your use of credit at no more than 30 percent of your total credit limit. You do not need to carry a balance to benefit. The CFPB states that paying in full each month helps you get the best scores and keeps interest costs low.

Because the reported balance is usually the statement balance, someone who charges a lot and pays in full can still show high utilization. Paying the card down before the statement date lowers the figure the bureaus see.

Moving debt does not reduce what you owe, but lower interest can help you pay it down faster. See our guides to balance transfer credit cards and debt consolidation options and costs.

3. Length of credit history (15%)

A longer history generally helps. myFICO says the model considers the age of your oldest account, the age of your newest account and the average age of all your accounts.

You cannot speed up time, but you can avoid shortening your history. Keep your oldest accounts open if they cost nothing, and avoid opening several accounts at once, since each one lowers your average age. Closing an account does not erase it straight away: Experian explains that a closed account in good standing stays on your report for 10 years from the closure date.

4. New credit (10%)

Opening several accounts in a short period signals higher risk, especially for people with short histories. myFICO says this category looks at how many new accounts you have, how many recent inquiries appear and how long it has been since you opened your newest account.

The effect is usually modest and temporary. A new account can help over time, because it adds available credit and more positive payment history.

5. Credit mix (10%)

Credit mix is your experience with different kinds of credit. FICO divides accounts into revolving accounts, such as credit cards, store cards and home equity lines, and installment accounts, such as mortgages, auto loans and student loans.

Handling both well is a mild positive. But myFICO is clear that you should not open accounts just to improve your mix. Credit mix is unlikely to decide an application, and a loan you do not need costs more than a few points are worth.

What does not affect your credit score

Your FICO Score is calculated only from your credit report. Anything that is not on the report cannot affect it, and several things that are on the report are deliberately ignored.

myFICO lists the following as not included in FICO Scores:

• race, color, religion, national origin, sex and marital status;
• age (FICO notes that other types of scores may consider it);
• salary, occupation, title, employer and employment history;
• where you live;
• the interest rate on any of your accounts;
• child support and family support obligations;
• your own requests for your report, promotional inquiries, administrative reviews by existing lenders and employer inquiries;
• whether you are taking part in credit counseling;
• public records other than bankruptcy. myFICO states that tax liens and civil judgments no longer affect FICO Scores; and
• any information not found in your credit report.

Rent, utilities and buy now, pay later plans sit in a grey area. A payment can only influence a score if someone reports it to a bureau, and many landlords and utility providers do not report on-time payments. An unpaid bill sent to a collection agency can still appear. Assume these payments may not help when paid on time but can hurt if they go to collections.

Hard vs soft inquiries

A hard inquiry happens when a lender checks your report because you applied for credit, and it can lower your score slightly. A soft inquiry happens when you check your own credit or a company reviews your file for another reason, and it never affects your score.

How much does a hard inquiry cost you?

Less than most people fear. myFICO says that for most people, one additional inquiry takes less than five points off a FICO Score. The effect can be bigger for people with few accounts or a short history.

Rate shopping is protected

Scoring models are designed not to punish you for comparing offers on one loan. myFICO explains that FICO Scores ignore mortgage, auto and student loan inquiries made in the 30 days before scoring, and treat multiple inquiries for the same kind of loan within a shopping window as one. The window is 14 days in older FICO versions and 45 days in newer ones. Since you cannot know which version a lender uses, do your rate shopping within about two weeks.

This protection does not cover credit cards. Each card application can count separately, so compare first and apply once. Our guide on how to choose the right credit card walks through that comparison.

How long negative items stay on your report

Most negative information can stay on a US credit report for seven years, and bankruptcy for up to ten. These limits come from the Fair Credit Reporting Act. After that the item should drop off automatically.

The CFPB summarizes the rule: a credit reporting company generally can report most negative information for seven years. A lawsuit or judgment can be reported for seven years or until the statute of limitations runs out, whichever is longer. Bankruptcies can stay for up to ten years.

Points people often get wrong

• Paying a collection does not erase it or restart the clock. Experian notes that the seven-year timeline applies whether or not you eventually pay.
• There are exceptions for large transactions. The CFPB notes that the time limits do not apply when a report is used for a job paying more than $75,000 a year or for credit or insurance of more than $150,000.
• Impact fades before the item disappears. Older problems carry less weight, so your score can recover well before seven years are up.

How to check your reports and scores for free

You can get your credit reports free from all three nationwide bureaus at AnnualCreditReport.com, the only website authorized for that purpose. Scores are not part of that service, but many card issuers, lenders and counselors show you a score at no cost.

Free credit reports

The FTC explains that federal law gives you a free report from each nationwide bureau every 12 months, and that the bureaus have permanently extended a program that lets you check each report once a week for free. There are three ways to order:

• Online at AnnualCreditReport.com.
• By phone on 1-877-322-8228. Reports are mailed within 15 days.
• By mail, by sending the Annual Credit Report Request Form to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.

You will need your name, address, Social Security number and date of birth, and you will answer security questions. The FTC warns that only one website is authorized to fill these orders, and that lookalike sites may try to sell you something or collect your details. Type the address yourself.

The FTC says you can also get an extra free report if a company took adverse action against you based on your report and you ask within 60 days, if you are unemployed and plan to look for work within 60 days, if you receive public assistance, if your report is inaccurate because of identity theft, or if you have a fraud alert on file.

Free credit scores

The CFPB lists several ways to get a score:

• Your credit card company or lender. Many show customers a free score on the statement or online.
• A nonprofit counselor. Credit counselors and HUD-approved housing counselors can often provide a free report and score and help you review them.
• A credit score service. Some are free and funded by advertising. Others charge or bundle scores with monitoring.

The CFPB adds two cautions: watch for "free trial" offers that start billing if you do not cancel, and note that some services provide "educational" scores that may differ from the ones lenders use.

What to look for in a report

The CFPB recommends reviewing your reports at least once a year. Checking never hurts your score. Look for accounts you do not recognise, wrong balances or statuses, payments wrongly marked late, duplicate debts, negative items older than the limits above, wrong personal details and hard inquiries you did not authorise.

How to dispute errors

If your credit report contains a mistake, you can dispute it for free with both the credit bureau and the company that supplied the information. The bureau generally has 30 days to investigate.

Step 1: dispute with the credit bureau

Contact each bureau that shows the error, in writing or through its online system. The CFPB says to include your contact details, the report confirmation number if you have one, each disputed item with its account number, a clear explanation of why it is wrong, a request to remove or correct it, and copies of supporting documents.

The FTC suggests enclosing a copy of your report with the errors circled, sending the letter by certified mail with a return receipt and keeping copies. It lists these dispute addresses:

• Equifax: P.O. Box 740256, Atlanta, GA 30348
• Experian: P.O. Box 4500, Allen, TX 75013
• TransUnion: P.O. Box 2000, Chester, PA 19016

Step 2: dispute with the furnisher

Also write to the company that reported the information. The CFPB says furnishers generally must investigate and respond within 30 days. If the information is inaccurate or cannot be verified, the furnisher must correct or remove it and notify the bureaus.

What happens next

• The bureau must give you the results in writing, plus a free copy of your report if the dispute leads to a change.
• If you ask, it must notify anyone who received your report in the past six months, or the past two years for employment purposes.
• A bureau can decline a dispute it considers frivolous, but the CFPB says it must tell you within five business days of that decision.
• If you disagree with the result, you can ask for a statement of dispute to be added to your file, and you can submit a complaint to the CFPB.

Be careful with "credit repair" offers

The FTC is blunt: no one can legally remove information from your report if it is both accurate and current. Credit repair organizations must not charge before they have done the work, must give you a written contract and must give you three days to cancel. Warning signs include upfront fees, advice not to contact the bureaus yourself and any suggestion that you create a "new credit identity," which the FTC says is fraud. Our guide on how to avoid loan scams and fake offers covers similar tactics.

Credit freezes and fraud alerts

A credit freeze blocks new lenders from seeing your credit report, which makes it hard for a thief to open accounts in your name. A fraud alert leaves your report visible but tells businesses to verify your identity first. Both are free, and neither affects your credit score.

Credit freeze

The FTC explains that a freeze is free, lasts until you remove it and is available to anyone. You must place it separately with each of the three bureaus.

The CFPB sets out the timing. A bureau must place a freeze within one business day of a phone or online request and within three business days of a mailed request. It must lift a freeze within one hour of a phone or online request. You can lift it temporarily, at no charge, when you apply for credit.

A freeze does not stop everything. Your existing creditors and certain government agencies can still see your report, and it does not prevent fraud on accounts you already have. The CFPB also says paid "credit locks" are no more effective than free security freezes.

Fraud alerts

A freeze is the stronger tool, because it blocks access. A fraud alert is quicker to set up and suits people who are actively applying for credit. You can use both. If someone has already used your identity, the FTC's IdentityTheft.gov site provides a recovery plan.

Building credit from zero

To build credit you need at least one account that reports your payments to the credit bureaus, and you need to pay it on time every month. With FICO, a score can appear once an account has been open for six months.

The CFPB points to secured credit cards and credit-builder loans as products designed for this. It also names products that do not help: debit cards, prepaid cards, payday loans and "buy here, pay here" auto loans generally are not reported to the three nationwide bureaus.

Secured credit cards

With a secured card, you put down a cash deposit and can then spend up to that amount. The CFPB's example is a $500 deposit for a $500 limit. You pay the bill like any other card, and the issuer reports your payments. Before applying, confirm that the issuer reports to all three bureaus and check the fees. Our secured credit cards guide explains deposits and fees in detail.

Credit-builder loans

A credit-builder loan works backwards. The CFPB explains that a bank or credit union holds the loan amount while you make small payments, usually over six to 24 months. At the end, you receive the money. Your payments are reported along the way, so you build a history and savings together. A missed payment is reported too, so choose an amount you can comfortably pay.

Becoming an authorized user

An authorized user is a secondary cardholder on someone else's credit card. Experian explains that the account's limit and payment history can appear on the authorized user's report, while the primary cardholder remains responsible for the bill.

This can add positive payment history, lower your utilization and lengthen your history. It works only if the primary cardholder manages the account well and the issuer reports authorized users. If they pay late or run up the balance, your credit can suffer too. In the UK the term is spelled "authorised user," and whether it helps depends on what the card provider reports.

Starter habits

• Put one small recurring bill on the card and pay the full statement balance automatically.
• Keep the balance well under the limit. On a low-limit card, a modest purchase can mean high utilization.
• Do not apply for several starter products at once.
• If you have moved countries, expect to start again. Credit histories generally do not transfer.

Common credit score myths

Most credit score myths come from confusing the score with your overall finances. The score measures one thing: how you have handled borrowed money, as recorded on your credit report.

• Myth: checking your own credit lowers your score. False. It is a soft inquiry with no effect, as the CFPB and myFICO confirm.
• Myth: you must carry a card balance to build credit. False. The CFPB says paying in full each month helps you get the best scores.
• Myth: a higher income means a higher score. False. Salary and employment are not in the score.
• Myth: closing old cards improves your score. Usually false. Closing a card removes its limit, which can push your utilization up.
• Myth: paying off a collection removes it. False. It can stay for seven years from the original delinquency, though paying still resolves the debt.
• Myth: married couples share a score. False. Each person has their own reports. Joint accounts appear on both.
• Myth: a company can wipe your record clean for a fee. False. The FTC says no one can legally remove accurate, current information.
• Myth: every application wrecks your score. False. myFICO says one inquiry typically costs fewer than five points.
• Myth: a credit freeze hurts your score. False. The CFPB says freezes do not affect scores in any way.
• Myth: using a debit card builds credit. False. Debit activity is not reported to the nationwide bureaus.
• Myth: bad marks stay forever. False. Most must come off after seven years, and their effect weakens well before then.

Credit scores in the UK

The UK has no single credit score and does not use the 300 to 850 scale. Three credit reference agencies, Experian, Equifax and TransUnion, each hold a file on you and each publishes its own consumer score on its own scale. Lenders generally apply their own scoring to your file, so a published score is only a rough indicator.

Different agencies, different scales

A number means nothing without the agency's name next to it. A score of 700 could be weak on one scale and good on another.

What is on a UK credit file

The ICO, the UK's data protection regulator, explains that the three agencies hold information on most UK adults, including how you have maintained credit and utility accounts, previous addresses, electoral roll information, and public records such as county court judgments, bankruptcies and other insolvency data. Negative entries such as a default generally stay for six years from the default date.

The electoral roll

Registering to vote is one of the simplest ways to strengthen a UK credit file, because lenders use the electoral roll to confirm your name and address. Experian's UK guidance says that once your electoral details are on your report, your Experian score will increase, and that details usually appear within about 30 days. Equifax also lists being registered to vote among the things that help.

You can register online through GOV.UK in about five minutes. You will be asked for your National Insurance number, but GOV.UK says you can still register without one. Eligibility depends on nationality and where you live. Experian adds that a permanent address is better than a temporary one, because lenders dislike many addresses in a short time.

The statutory credit report

You have a legal right to see the information an agency holds about you, free of charge. The ICO advises looking for the "statutory report" on each agency's website so that you do not sign up for a paid subscription by mistake. The agency has one month to respond, which can be extended in some cases. Experian states that its statutory report does not include the Experian Credit Score. That is fine: the file is what lenders use.

Financial links and corrections

A joint account or joint loan creates a financial link between you and the other person. The ICO explains that when one of you applies for credit, a lender may look at the other's file as well. If something on your file is wrong, the ICO suggests contacting the agency first and then the lender. If it is not corrected, you can add a notice of correction explaining your side, and you can complain to the ICO.

A short note for Canada

Canada has two main credit bureaus, Equifax and TransUnion, and Canadian credit scores range from 300 to 900. The FCAC says the exact formulas are not public and the score you see may differ from the one a lender sees.

• Factors: payment history, credit use, length of history, number of applications and types of credit.
• Utilization: the FCAC suggests trying to use less than 30% of your total credit limit.
• Rate shopping: several inquiries for a car loan or mortgage within two weeks are generally treated as one.
• Free access: you can order your report free from both bureaus. Checking does not affect your credit.
• Reporting periods: late or unpaid payments generally stay up to six years. A first bankruptcy stays six or seven years after discharge, depending on the province.

Realistic timelines for improvement

How fast a credit score improves depends on what is holding it down. High card balances can be fixed in a month or two. A missed payment takes months to years to fade. A thin file takes about six months to become scorable under FICO. Nothing legitimate works overnight.

The table is a general guide, not a promise. No one can tell you exactly how many points an action will add.

Utilization is the fastest lever because it is calculated from current balances. A late payment is a historical fact that only time softens. If you have an application coming up, see our guide on how to improve your credit score before applying for a loan.

Step-by-step action plan

The fastest route to a better credit score is to fix errors, lower card balances and then pay everything on time without exception. Work through these steps in order.

1. Pull all three reports free at AnnualCreditReport.com. In the UK, request each agency's statutory report.
2. Read every line and mark anything wrong or unfamiliar.
3. Dispute errors in writing with the bureau and the furnisher. Keep copies.
4. Get a baseline score from your card issuer, lender or a counselor, and note the model.
5. Bring past-due accounts current. If you cannot pay, call the creditor before the due date.
6. Set up automatic payments for at least the minimum on every account.
7. Calculate your utilization, overall and for each card.
8. Pay card balances down, starting with cards closest to their limits. Aim for no more than 30 percent, and lower if you can.
9. Keep old accounts open unless a fee makes that a bad idea.
10. Pause new applications. Keep any rate shopping within about two weeks.
11. If your file is thin, add one starter account and pay it perfectly.
12. Freeze your credit at all three bureaus if you are not applying soon.
13. Review every few months, and re-read your reports at least once a year.
14. Get free help if you are struggling. The FTC notes that nonprofit credit counseling is available through credit unions, universities and military programs.

Credit score checklist

Use this list once a year, and before any major application.

• I have checked my reports from all three bureaus in the last 12 months.
• Every account is mine, and balances and statuses are correct.
• My personal details are accurate.
• I have disputed any errors in writing and kept copies.
• I know at least one of my scores and which model it uses.
• Every account pays automatically, at least the minimum.
• No account is past due.
• My card utilization is at or below 30 percent, and no card is near its limit.
• My oldest accounts are still open.
• I have not applied for credit I do not need.
• My credit is frozen at all three bureaus, or I have decided why not.
• I have not paid anyone who promised to remove accurate information.
• If I live in the UK, I am on the electoral roll at my current address.

FAQ

What is a credit score in simple terms?

It is a three-digit number that tells lenders how likely you are to repay borrowed money on time. It is calculated from your credit report by a scoring model such as FICO or VantageScore. In the US, most scores run from 300 to 850.

How is a credit score calculated?

A FICO Score uses five categories from your credit report: payment history (35%), amounts owed (30%), length of credit history (15%), new credit (10%) and credit mix (10%). VantageScore uses similar information. Neither uses your income or bank balance.

What is a good credit score?

On the FICO scale, 670 to 739 is good, 740 to 799 is very good and 800 or above is exceptional. On VantageScore, the good tier starts at 661. Each lender sets its own requirements.

Why is my credit score different on different apps?

Each may use a different model, version or credit bureau, and may have pulled the data on a different day. The CFPB confirms that you have many scores. Small differences are normal.

Does checking my own credit score lower it?

No. Checking your own report or score is a soft inquiry and has no effect.

How many points does a hard inquiry take off?

For most people, fewer than five points, according to myFICO. FICO counts inquiries for 12 months, though they stay on the report for two years.

How long does a late payment stay on my credit report?

Up to seven years from the original delinquency date. Creditors generally do not report a payment as late until it is at least 30 days past due, and the effect fades with time.

How long does it take to build a credit score from nothing?

FICO needs at least one account open for six months and reported in the last six months. VantageScore can produce a score sooner. A strong score takes a year or more of on-time payments.

What credit utilization should I aim for?

The CFPB suggests no more than 30 percent of your total limit. FICO says lower utilization has a more positive effect. You do not need to carry a balance.

Does paying off a collection raise my credit score?

It depends on the scoring model. Paying does not remove the entry, which can stay for seven years from the original delinquency. Confirm the debt is yours before paying.

Does closing a credit card hurt my credit score?

It can. Closing a card reduces your available credit, which can raise your utilization. The account's history stays on your report for up to 10 years if it was in good standing.

Does my income affect my credit score?

No. Salary, employer and job title are not part of a FICO Score. Lenders may use your income separately in their decision.

How do I get my credit report for free?

In the US, go to AnnualCreditReport.com or call 1-877-322-8228. You can get a free report from each bureau every week. In the UK, ask each agency for your statutory credit report. In Canada, order from Equifax and TransUnion.

How do I fix an error on my credit report?

Dispute it in writing with each bureau that shows the error and with the company that reported it. Include copies of evidence. The bureau generally has 30 days to investigate, and you can complain to the CFPB.

Does a credit freeze affect my score?

No. A freeze is free, does not affect your score and stops most new lenders seeing your file. Place it with all three bureaus and lift it when you apply for credit.

Does my US credit score work in the UK or Canada?

Generally no. Credit files are kept separately in each country, so expect to build a new file if you move.

Bottom line

A credit score is a summary of how you have handled borrowed money, calculated from your credit report. It is not a measure of your income or your worth. Two things drive most of it: whether you pay on time and how much of your available credit you use.

The plan is short. Check your reports for free and fix any errors. Pay every bill on time. Keep card balances low. Leave old accounts open, apply sparingly and freeze your files when you are not applying. Then give it time. Scores grow through steady behavior, not shortcuts. This guide is general information, not financial advice.

Official sources referenced in this guide

• CFPB: What is a credit score?
• CFPB: What is a credit report?
• CFPB: What is a FICO score?
• CFPB: How do I get and keep a good credit score?
• CFPB: Where can I get my credit score?
• CFPB: How long does negative information remain on my credit report?
• CFPB: Hard inquiry vs soft inquiry
• CFPB: How do I dispute an error on my credit report?
• CFPB: Security freezes
• CFPB: Building credit with no credit history
• CFPB: Credit reports and scores
• FTC: Free Credit Reports
• FTC: Understanding Your Credit
• FTC: Disputing Errors on Your Credit Reports
• FTC: Credit Freeze or Fraud Alert
• FTC: Fixing Your Credit FAQs
• USA.gov: Credit reports
• myFICO: What's in my FICO Scores?
• myFICO: What is a FICO Score?
• myFICO: Payment history
• myFICO: Amounts owed
• myFICO: Length of credit history
• myFICO: New credit
• myFICO: Credit mix
• myFICO: What's not in my FICO Scores?
• myFICO: Credit checks and inquiries
• myFICO: Minimum requirements for a FICO Score
• Experian: What is a VantageScore credit score?
• Experian: How long information stays on your credit reports
• Experian: How long late payments stay on a credit report
• Experian: Authorized users and credit
• ICO (UK): Credit
• GOV.UK: Register to vote
• Experian UK: The Experian Credit Score
• Experian UK: Statutory Credit Report
• Experian UK: The electoral roll
• Equifax UK: Credit score ranges
• TransUnion UK: Expanded 0 to 999 consumer credit score
• FCAC (Canada): Credit report and score basics
• FCAC (Canada): Getting your credit report and score
• FCAC (Canada): Improving your credit score
• FCAC (Canada): How long information stays on your credit report