Credit reports and credit scores, explained
In short: your credit report is a record of how you have borrowed and repaid; your credit score is a number worked out from it that lenders use to judge risk. Paying on time and keeping balances low matter most. You can get your reports from all three national credit bureaus for free at AnnualCreditReport.com, and checking them does not hurt your score.
Report and score: not the same thing
- Credit report: kept by the three national credit bureaus (Equifax, Experian and TransUnion). It lists your credit cards and loans, balances, payment history, and certain debts in collection.
- Credit score: a three-digit number, often from 300 to 850, worked out from your report. There are many scoring models, so you have more than one score.
Newcomers usually start with no US credit history at all, because credit from another country normally does not carry over. See Building US credit from zero.
What affects your score
Scoring companies publish the broad factors. For the widely used FICO scores, roughly:
- Payment history (about 35%): paying on time, every time.
- Amounts owed (about 30%): how much of your credit limits you are using.
- Length of credit history (about 15%).
- New credit (about 10%): recent applications and new accounts.
- Credit mix (about 10%): having different types, such as a card and a loan.
Your income, savings, nationality and immigration status are not part of your credit score.
Check your reports for free
Use AnnualCreditReport.com, the official site for free reports from all three bureaus. Look out for copycat sites that charge or ask for card details. Checking your own report is a "soft" inquiry and does not lower your score. Some banks and card issuers also show you a free score.
Fixing mistakes
If something on your report is wrong, such as an account that isn't yours or a payment marked late that wasn't, you can dispute it for free with the credit bureau and with the company that reported it. Be wary of "credit repair" companies that charge to do what you can do yourself, or promise to remove correct information.
Protect your credit
- A security freeze stops new lenders from seeing your report, which blocks most new accounts in your name. It is free, and you can lift it when you apply for credit.
- Never share your Social Security number, card details or one-time codes with someone who contacts you unexpectedly.
Handy tools
- Loan and EMI calculator: monthly payment, total interest and a year-by-year table.
General information, not financial advice. Rules, fees and rates change and depend on your situation. Check with your bank, the provider or a qualified professional before you decide.
Sources
- CFPB: Credit reports and scores
- CFPB: How do I get a free copy of my credit reports?
- CFPB: Will requesting my credit report hurt my credit score?
- CFPB: How do I dispute an error on my credit report?
- CFPB: What is a credit freeze or security freeze?
- AnnualCreditReport.com: Free credit reports (official site)