What is a Credit Score?

A credit score provides information to lenders regarding your creditworthiness, which is an assessment of how likely you are to repay a loan based on your credit history. It is determined by analyzing the data in your credit reports. FICO® Scores are widely accepted as the standard credit scores and are utilized by 90% of major lenders.

Credit scores play a significant role in determining the availability of credit and the terms offered by lenders, such as interest rates. They are crucial for maintaining good credit health.

When applying for credit, whether it’s for a credit card, auto loan, or mortgage, lenders assess the risk associated with lending you money. They often request a credit report along with a credit score that reflects the information in the report. A credit score assists lenders in evaluating your creditworthiness by summarizing your credit risk based on a snapshot of your credit report at a specific point in time.

It’s essential to note that not all credit scores available for purchase online are FICO Scores.

About FICO Scores:

The most widely used credit scores are FICO Scores, developed by Fair Isaac Corporation. Top lenders rely on FICO Scores for making numerous credit-related decisions annually. These scores are calculated solely based on information from credit reports maintained by the credit bureaus—Experian, Equifax, and TransUnion. By comparing this data to historical credit reports, FICO Scores estimate your future credit risk level, indicating the likelihood of timely loan repayment.

What constitutes a good credit score?

Credit scores typically range from 300 to 850. The higher the score, the lower the risk perceived by lenders. A credit score within the range of 670-739 is generally considered “good.”

Credit Score Ranges





This credit score is well below the average score of U.S. consumers and demonstrates to lenders that the borrower may be a risk.



This credit score is below the average score of U.S. consumers, though many lenders will approve loans with this score.



This credit score is near or slightly above the average of U.S. consumers and most lenders consider this a good score.


Very Good

This credit score is above the average of U.S. consumers and demonstrates to lenders that the borrower is very dependable.



This credit score is well above the average score of U.S. consumers and clearly demonstrates to lenders that the borrower is an exceptionally low risk.

While many lenders utilize credit scores, such as FICO Scores, to aid in their lending decisions, each lender has its own approach, including their acceptable level of risk. There is no universal “cutoff score” that applies to all lenders, and additional factors are taken into account to determine the actual interest rates offered.

Why does my credit score vary?

When calculating a credit score, the credit bureau also provides up to five primary reasons that heavily influence that specific score. These factors contribute to your credit score:

What comprises my FICO® Scores?

FICO Scores are derived from various credit data points in your credit report. This data is categorized into five groups: payment history (35%), amounts owed (30%), length of credit history (15%), new credit (10%), and credit mix (10%).

Your FICO Scores consider both positive and negative information in your credit report. The percentages in the provided chart indicate the significance of each category in the calculation of your FICO Scores. The importance of these categories may vary from person to person, which will be addressed in the next section.

Credit category importance varies per individual

Just like individuals are unique, their FICO Scores are also unique. While the five aforementioned categories are utilized, the importance of each category can differ. For instance, credit scores for individuals with limited credit history will be calculated differently than those with longer credit histories.

Furthermore, as the information in your credit report changes, the evaluation of these factors in determining your FICO Scores also evolves.

Your credit report and FICO Scores undergo regular updates. Consequently, it is not possible to precisely measure the impact of a single factor on your FICO Score without considering your entire report. Even the importance levels presented in the FICO Scores chart above are based on the general population and may differ for various credit profiles.

FICO Scores exclusively rely on information from your credit report

Your FICO Score is solely calculated based on the information contained in your credit report. However, when making a credit decision, lenders may consider various factors such as your income, employment tenure, and the type of credit you are seeking.

What’s not included in my FICO® Scores?

FICO® Scores take into account a wide range of information from your credit report. However, they do not consider:

  • Your race, color, religion, national origin, sex, or marital status. U.S. law prohibits the inclusion of these factors in credit scoring, as well as the consideration of public assistance receipts or the exercise of consumer rights under the Consumer Credit Protection Act.
  • Your age. While other types of scores may consider age, FICO Scores do not.
  • Your salary, occupation, job title, employer, employment dates, or employment history. Lenders may consider this information, as may other types of scores.
  • Your place of residence.
  • Any interest rates applied to specific credit cards or accounts.
  • Any items reported as child/family support obligations.
  • Certain types of credit report inquiries. “Consumer-initiated” inquiries you make to check your credit report, “promotional inquiries” made by lenders for “pre-approved” credit offers, and “administrative inquiries” made by lenders to review your account are not counted. Inquiries labeled as employer-related are also not considered.
  • Any information not found in your credit report.
  • Any information that is not proven to be predictive of future credit performance.
  • Your participation in any form of credit counseling.


What’s in your credit report?

What factors are considered when calculating my FICO Score?

Payment history (35%):

The primary concern of lenders is whether you have made timely payments on previous credit accounts. This factor helps lenders assess the level of risk associated with extending credit to you. It holds the greatest importance in determining your FICO Score.

Understanding Payment History:

Payment history reflects how consistently you have made payments across the duration of your credit history. It accounts for 35% of your score and plays a significant role in its calculation. Research has shown that your payment track record is a strong predictor of your likelihood to fulfill debt obligations as agreed. Naturally, lenders prioritize your past repayment behavior when assessing loan applications.

A few instances of late payments do not automatically result in a severely impacted score. A generally positive credit history can outweigh one or two late credit card payments.

However, having no late payments on your credit report does not guarantee a “perfect score.” Your payment history is just one aspect considered in calculating your FICO Scores.

Types of accounts evaluated for credit payment history:

Credit cards (Visa, MasterCard, American Express, Discover, etc.)

Retail accounts (credit from stores where you shop, like department store credit cards)

Installment loans (loans with regular payments, such as car loans)

Finance company accounts

Mortgage loans

Public records and collection items

These events are viewed as significant, although older or smaller items hold less weight compared to recent or larger ones.

Negative factors include:

Bankruptcies – remain on your credit report for 7-10 years, depending on the type


Wage attachments

Seven components comprising your payment history:

Payment details for credit cards, retail accounts, installment loans, mortgages, and other types of accounts

The current status of delinquent payments or previous delinquencies

The amount still owed on delinquent accounts or collection items

The number of past due items on your credit report

Adverse public records (e.g., bankruptcies)

The duration since delinquencies, adverse public records, or collection items occurred

The number of accounts being paid as agreed

Tips for improving your payment history:

The following tips may seem obvious, but considering them can provide the motivation to take the necessary steps to improve your payment history. While it is possible to enhance your payment history, the responsibility lies solely with you. Here’s how:

Pay bills on time: This may sound simple yet challenging, but it is the most effective way to start improving your payment history. Establish a budget to ensure you have sufficient funds to meet your payment obligations promptly. It may require some sacrifices, but it’s better to make a few adjustments now than to damage your credit for the long term.

Catch up on missed payments: The older a credit issue, the less impact it has on your credit score. By consistently paying your bills on time, even after experiencing late payments, you increase the potential for your FICO Scores to rise.

Contact creditors and seek assistance: Reach out to your creditors to explore options such as lowering interest rates to accelerate debt repayment. You can also consider consulting a credit counseling service that can help you create a suitable budget and consolidate your debts, potentially improving your credit history.

Payment history holds the greatest influence on your credit score, so it is crucial to pay close attention to it and ensure your bills are paid punctually. Next, read about the role of debt amounts and how they factor into your FICO Scores.

Amounts owed (30%):

Merely having credit accounts and owing money does not automatically classify you as a high-risk borrower with a low FICO Score. However, if you are utilizing a significant portion of your available credit, it may indicate that you are financially strained, leading lenders to perceive a higher risk of default.


What is Amount Owed?

In broad terms, “Amounts owed” refers to the total amount of debt you have. However, the specific factor that impacts your credit score is your credit utilization. It is not the overall debt amount that holds significant weight, but rather the proportion of your available credit that you have utilized. When a large percentage of your available credit is utilized, it suggests that you may be overextended financially, increasing the likelihood of late or missed payments.


Amounts owed on accounts determines 30% of a FICO® Score

FICO research indicates that the level of debt you carry serves as a predictive factor for future credit performance. This is because the amount owed can impact your ability to meet all your monthly credit obligations in a timely manner. It’s important to note that having debt does not automatically label you as a high-risk borrower. However, as your balances increase, the likelihood of facing difficulties in making timely monthly payments also increases. Nevertheless, this is just one aspect that contributes to determining your credit score.

The science behind credit scoring involves determining the appropriate threshold for debt levels based on individual credit profiles. Your FICO Scores consider multiple factors in their calculation.


There are 5 factors that the Amounts Owed Category looks at:

The amount owed on all accounts

It’s important to understand that even if you consistently pay off your credit cards in full every month, your credit report may still display a balance on those cards. Typically, the total balance shown on your most recent statement is what will be reflected in your credit report.

The amount owed on different types of accounts

Apart from the total amount you owe, your FICO Scores also take into account the specific amounts you owe on different types of accounts, such as credit cards versus installment loans. This differentiation is considered in the calculation of your scores.


How many accounts have balances?

Having a higher number of accounts with outstanding balances can indicate a greater risk of over-extension.


Credit utilization ratio on revolving accounts

The credit utilization ratio on your revolving accounts, which refers to the percentage of your available credit that you are using, is a significant factor in determining your FICO Scores. Utilizing a high percentage of your available credit indicates that you are approaching the maximum limit on your credit cards, which can negatively impact your scores.

Conversely, using a low percentage of your available credit can have a positive effect on your scores. In some cases, maintaining a low credit utilization ratio can have a more favorable impact on your FICO Scores than not using any of your available credit.

It is important to understand that your current account balance may not necessarily be the balance reflected on your credit report. The account balance shown on your credit report is typically based on the balance reported by your lender to the credit bureau, which is often the balance from your most recent monthly statement. Therefore, even if you pay off your credit card balances in full each month, your account balance may not appear as $0 on your credit report.

How much of the installment loan amounts is still owed, compared with the original loan amount?

Let’s say you took out a $10,000 car loan and have repaid $2,000 so far. Even though you’ve made progress, you still owe more than 80% of the original loan amount, including interest. Paying down installment loans demonstrates your ability and willingness to manage and repay debt, which is viewed positively.

The amount of debt you owe is a significant component of your credit and accounts for 30% of your FICO Score. It’s crucial to keep track of your debt levels and credit utilization.

Length of credit history, which makes up 15% of your FICO Scores, is also taken into consideration.

Your FICO Scores consider:

  • The duration for which your credit accounts have been open, including the age of your oldest and newest accounts, as well as the average age of all your accounts.
  • The length of time specific credit accounts have been established.
  • The time that has passed since you last used certain accounts.

What is the Length of Your Credit History?

Similar to the aging process of fine wine, whiskey, and cheese, most credit histories tend to improve over time. While the length of your credit history contributes only 15% to your FICO® Score, it holds significant importance for lenders and can greatly influence your loan approval prospects.

Even individuals who haven’t had credit for an extended period can still achieve a high FICO Score if the rest of their credit report demonstrates positive factors. However, a longer credit history will consistently have a positive impact on FICO Scores.

Regarding the length of credit history, your FICO Scores consider three key factors:

  1. The duration for which your credit accounts have been open, encompassing the age of your oldest account, the age of your newest account, and the average age of all your accounts.
  2. The length of time specific credit accounts have been open.
  3. The time that has passed since the accounts were last used.

All three pieces of information can be found in your credit report.

How to establish your credit history

The significant challenge of building your FICO Score is that you typically need credit to obtain credit. It can be difficult to establish lines of credit and improve your FICO Score if you don’t already have a good credit history. However, there are actions you can take to help grow the length of your credit history. Here are a few suggestions to get you started:

  1. Apply for a secured credit card: A secured card requires you to provide cash collateral as a guarantee for the credit line. FICO Scores consider secured cards in the same way as any other credit card. Many banks and lending institutions offer secured cards, and most of them report secured card activity to the credit bureaus.
  2. Seek a co-applicant or authorization: Explore the option of having a friend or family member with a good credit history become a co-applicant on a credit application or authorize you to use their credit card. This can help you establish your credit history. While it may be a significant request, if they are willing to assist, it can be a positive way to start building your credit history.
  3. Adopt a long-term credit strategy: Develop a mindset that views the length of your credit history as an integral part of your broader credit-building plan. Use your credit card responsibly by keeping balances low and making payments on time. By doing so, you will gradually build a strong credit history that can benefit you when you need credit in the future.

Consider whether or not to keep accounts open

Closing a credit card that you have recently paid off may seem tempting, but it’s important to consider the potential impact on your credit history’s length. Another factor to understand is the role of credit mix in your FICO Score.

Credit mix accounts for 10% of your FICO Score and encompasses a variety of credit types, such as credit cards, retail accounts, installment loans, finance company accounts, and mortgage loans. It’s not necessary to have every type of credit account.

Credit mix is evaluated by creditors to assess your ability to manage different types of credit. FICO not only considers the mix of credit you have but also examines the payment history associated with each credit type. For example, if you have a diverse mix of installment and revolving loans but a poor payment history, your FICO Score will reflect the negative payment record, which constitutes 35% of your score.

While credit mix is a smaller portion of your FICO Score, it likely won’t be the sole determinant of your ability to obtain credit from lenders. However, if you aim to maximize your FICO Score, having a good credit mix can contribute positively.

It’s essential to note that pursuing multiple new credit lines within a short period can have consequences. Creditors typically perform a hard inquiry when you apply for new credit, which can temporarily lower your credit score and remain on your credit report for two years. Furthermore, opening numerous accounts in a short timeframe may signal financial distress to creditors, potentially leading to loan denials.

If you wish to add a missing credit type to diversify your credit mix, it’s crucial to balance the potential risk and reward. Applying for a small loan solely to showcase your ability to manage payments successfully may not be worth the temporary drop in your score. Ultimately, the decision rests with you.

Consider your experience with both revolving credit (e.g., credit cards, retail store cards, gas station cards, HELOC) and installment accounts. Having a mix of these types can contribute positively to your credit score.

Remember, responsible credit management and maintaining positive payment behavior over time are key to improving and maintaining a healthy credit mix.

Installment accounts are characterized by fixed monthly payments until the balance is fully paid off. Examples of installment accounts include mortgages, auto loans, and student loans.

Now that you have a better understanding of credit mix, let’s explore the final factor that affects your FICO Score: new credit. Discover how new credit can impact your credit score.

What is New Credit?

New credit constitutes 10% of your FICO Score. When you apply for new credit, inquiries are recorded on your credit report for two years. However, FICO Scores only consider inquiries made within the last 12 months.

In today’s world, people tend to have more credit and frequently seek new credit opportunities. FICO Scores reflect this trend. Nevertheless, research indicates that opening multiple new credit accounts within a short period poses a higher risk, especially for individuals with limited credit history. FICO Scores assess several factors related to new credit.

Here are three key aspects to consider regarding the new credit factor:

  1. Number of new accounts:

FICO Scores evaluate the number of new accounts you have, categorized by account type. They may also assess the proportion of your accounts that are new.

  1. Rapid account openings:

If you have a relatively short credit history, avoid opening numerous new accounts rapidly. Doing so can lower your average account age, which has a more significant impact on your FICO Scores when you have limited credit information. Even if you have a long credit history, opening a new account can still lead to a decrease in your FICO Scores.

  1. Recent inquiries:

An inquiry occurs when a lender requests your credit report or score. While FICO Scores consider only inquiries from the past 12 months, inquiries remain on your credit report for two years. FICO Scores are designed to focus on inquiries that genuinely affect credit risk, as not all inquiries are related to credit risk.

It’s important to note the following facts about inquiries:

  • Inquiries typically have a minor impact.
  • Many types of inquiries are completely disregarded.
  • The scoring model accounts for “rate shopping.”

Remember that checking your own credit report has no effect on your FICO Scores if you obtain it directly from a credit reporting agency or an authorized organization.

Understanding Credit Inquiries:

When you apply for credit, the lender requests a copy of your credit report from a credit bureau. Consequently, their credit inquiries appear on your credit report. Only inquiries resulting from your applications for new credit affect your FICO Scores.

There are two types of credit inquiries. Soft inquiries, such as reviewing your own credit report, do not impact your FICO Score. Hard inquiries, which occur when actively applying for a new credit card or mortgage, do affect your score. Let’s delve into how hard inquiries can influence your FICO Score.

More examples of hard inquiries:

  • Applying for financing at a car dealership, prompting them to pull your credit report.
  • Responding to a preapproved credit card offer received in the mail.
  • Requesting a credit line increase from your credit card company, leading them to obtain a fresh credit report to assess your eligibility.

More examples of soft inquiries:

  • Your bank acquiring updated FICO Scores of all its customers to evaluate the credit quality of its customer base.
  • Your new employer conducting a credit report check as part of the new employee screening process.

Do Credit Inquiries Affect My FICO Score?

FICO’s research demonstrates that opening multiple credit accounts within a short period poses a higher credit risk. If your credit report indicates that you have applied for numerous new credit lines within a brief timeframe (excluding rate shopping for a single loan, which is treated differently), your FICO Scores may be lower as a result. While FICO Scores consider only inquiries from the past 12 months, inquiries remain on your credit report for two years.

Applying for several credit cards in quick succession will result in multiple inquiries appearing on your report. Seeking new credit can imply increased risk. However, most credit scores are not significantly affected by multiple inquiries from auto, mortgage, or student loan lenders within a short period. Typically, these inquiries are treated as a single inquiry and have a minimal impact on your credit scores.

How Much Do Credit Inquiries Affect My Score?

The impact of credit inquiries varies depending on individual credit histories. Generally, inquiries have a minor effect on FICO Scores. For most people, an additional credit inquiry will lower their FICO Scores by less than five points.

To put it into perspective, FICO Scores range from 300 to 850. Inquiries may have a more substantial impact if you have few accounts or a short credit history. Additionally, a high number of inquiries indicates higher risk. Statistically, individuals with six or more inquiries on their credit reports are up to eight times more likely to declare bankruptcy compared to those with no inquiries. While inquiries play a minor role in assessing risk and constitute only 10% of the FICO Score, timely bill payments and overall debt burden reflected in your credit report are far more crucial factors.

What to Know About Rate Shopping?

Research indicates that FICO Scores are more accurate when they handle loans commonly associated with rate shopping, such as mortgages, auto loans, and student loans, differently. For these types of loans, FICO Scores disregard inquiries made in the 30 days preceding the scoring. Consequently, if you find a loan within 30 days, the inquiries will not affect your scores while you are rate shopping.

Furthermore, FICO Scores consider rate-shopping inquiries older than 30 days that appear on your credit report. If such inquiries are found, your scores will treat them as part of a typical shopping period, considering them as a single inquiry. The length of the shopping period depends on the version of the FICO score formula chosen by each lender and used by the credit reporting agency to calculate your FICO Scores. Older versions consider any 14-day span as the shopping period, while newer versions consider any 45-day span.

Important Tips for Rate Shopping:

If you need a loan, focus your rate shopping within a designated period, such as 30 days. FICO Scores distinguish between a search for a single loan and a search for multiple new credit lines, based in part on the duration over which the inquiries occur.

When seeking new credit, only apply for and open necessary credit accounts. Before applying, it’s advisable to review your credit report and FICO Scores to understand your current standing. Checking your own information will not impact your FICO Scores.

As a general guideline, it is acceptable to apply for credit when needed. Keep this information in mind to approach the credit-seeking process with confidence.

The age of your most recently opened account is a factor that affects your FICO Scores. It considers how long it has been since you opened a new credit account, particularly for specific types of accounts.

Opening new credit can potentially lower your FICO Scores in a few ways. When you apply for new credit, an inquiry is placed on your credit report. This inquiry can slightly decrease your score. Additionally, a new credit card or line of credit affects the length of your credit history. It lowers the average age of your accounts, which, in turn, reduces your length of credit history and impacts your credit score.

Furthermore, new credit can increase the “amounts owed” factor of your credit score. It contributes to credit utilization, which is the ratio of your credit balances to your credit limits. Generally, lower credit utilization positively affects your credit score. However, opening and using a new credit card or line of credit brings you closer to your credit limit, potentially leading to a lower score.

On the other hand, new credit can boost your FICO Scores in certain circumstances. If the new credit account helps diversify the types of accounts you currently have, it can improve the “credit mix” factor of your credit score. It demonstrates to lenders that you can manage different types of credit, reducing their lending risk.

For example, if you open a new credit card account and maintain a low balance or don’t use it for new purchases over time, your credit utilization decreases. This can result in an increase in your credit score.

If you have a poor payment history and are starting from scratch to establish a positive one, opening new credit can also help. By proving to lenders that you can make timely payments, you can gradually raise your score.

However, it’s important to carefully consider whether you truly need a new credit account. The decision to open new credit should be made after thoughtful evaluation. In the next section, we will discuss how to improve your credit scores.

To repair your credit and enhance your FICO Scores, it’s crucial to start by correcting any errors in your credit history, if they exist. Then, follow the guidelines below to maintain a consistent and positive credit history. Restoring bad credit or building credit for the first time requires patience and discipline. Beware of quick-fix solutions that claim to improve your credit score rapidly, as they often backfire.

The best approach to rebuilding credit is to responsibly manage it over time. If you haven’t done so, you’ll need to repair your credit history before witnessing an improvement in your credit score. The following steps will help you in this process.

Steps to Improve Your FICO Score:

Check your credit report for errors:

  1. Thoroughly review your credit report from all three credit reporting agencies for any inaccurate information. If you find any incorrect or missing data, dispute it by contacting the credit reporting agency and the respective lender. The next section will provide more information on disputing errors in your credit report.

Remember, checking your own credit report or FICO Score has no impact on your credit score.

Pay bills on time:

  1. Making timely payments to your lenders and creditors significantly contributes to your credit scores, accounting for 35% of the FICO Score calculation. Past issues like missed or late payments are not easily fixed.
  • Ensure you pay your bills on time: Delinquent payments, even if only a few days late, and collections can have a considerable negative impact on your FICO Scores. Utilize payment reminders offered by your banks’ online portals, and consider enrolling in automatic payments through your credit card and loan providers to ensure timely payments.
  • If you have missed payments, get current and stay current: Poor credit performance does not haunt you forever. The longer you consistently pay your bills on time after being late, the more your FICO Scores will increase. The impact of past credit problems on your scores diminishes over time as recent good payment patterns appear on your credit report.
  • Note that paying off a collection account does not remove it from your credit report; it will remain on your report for seven years.
  • If you are struggling financially, contact your creditors or seek assistance from a legitimate credit counselor. While this won’t immediately rebuild your credit score, managing your credit and making timely payments over time will lead to an increase in your score. Seeking help from a credit counseling service will not harm your FICO Scores.

Reduce the amount of debt you owe:

  1. Your credit utilization, which is the balance of your debt compared to your available credit, affects 30% of a FICO Score calculation. While it may be easier to rectify than payment history, it requires financial discipline and adherence to the following tips:
  • Keep your balances low on credit cards and other revolving credit: High outstanding debt can negatively impact your credit score.
  • Pay off debt rather than moving it around: The most effective way to improve your credit scores in this area is by paying down your revolving (credit card) debt. Owing the same amount but having fewer open accounts might lower your scores. Create a payment plan that prioritizes the highest interest cards first while maintaining minimum payments on your other accounts.
  • Avoid closing unused credit cards as a short-term strategy to raise your scores.
  • Refrain from opening multiple new credit cards that you don’t need just to increase your available credit. This approach could backfire and lower your credit scores.

How to Fix Errors on Your Credit Reports and How They Occur:

It’s important to promptly correct any mistakes on your credit reports by contacting both the credit bureau and the organization that provided the incorrect information. Under the Fair Credit Reporting Act, both parties are responsible for rectifying inaccurate or incomplete information in your report.

Note that all three credit bureaus now accept online dispute filings, with Experian exclusively accepting online submissions.

For information on initiating a dispute and correcting errors on your credit reports, refer to the following section.

How to Correct Errors on Your Credit Reports:

To rectify errors on your credit report, you need to contact the credit bureau that displays the inaccurate information. Your FICO Score relies on the information within your credit reports, so any incorrect or erroneous information can negatively impact your score.

For myFICO customers seeking to contact each credit bureau, please use the following information:


All disputes with Equifax are handled online. Visit Equifax Disputes to initiate the process.


All disputes with Experian are handled online. Visit Experian Disputes to begin the dispute process.


Phone: 1-800-916-8800

Address: TransUnion Disputes, 2 Baldwin Place, P.O. BOX 1000, Chester, PA 19022

For TransUnion disputes, you no longer need to provide a File Identification Number (FIN) as it is not necessary to speak to a live agent.

Here are your rights concerning the information on your credit report:

The Fair Credit Reporting Act (FCRA) is designed to ensure that credit bureaus provide accurate and complete information to businesses when assessing your applications.

Your rights under the Fair Credit Reporting Act include:

Access to your credit report:

  1. You have the right to receive a copy of your credit report, containing all the information in your file at the time of your request.

Notification of credit report recipients:

  1. You have the right to know the names of individuals or entities that have received your credit report for most purposes within the last year, or for employment purposes within the last two years.

Disclosure of credit bureau information:

  1. If your application is denied based on information from a credit bureau, the company denying your application must provide the name and address of the credit bureau they consulted.

Free credit report upon denial:

  1. If your application is denied due to information provided by a credit bureau, you have the right to request a free copy of your credit report. This request must be made within 60 days of receiving the denial notice.

Dispute resolution:

  1. If you believe there are inaccuracies or incomplete information in your credit report, you have the right to file a dispute with both the credit bureau and the company that furnished the information. Both entities are legally obligated to investigate your dispute.

Adding a summary explanation:

  1. If your dispute is not resolved to your satisfaction, you can add a summary explanation to your credit report.

When filing a dispute, clearly state the inaccurate information you believe exists in your report. The credit bureaus must investigate the disputed items within 30 days, unless they consider your dispute to be frivolous. Include supporting documents (copies, not originals) that substantiate your position. Additionally, provide your complete name and address in your communication, and:

  • Clearly identify each disputed item in your report.
  • State the facts and explain why you are disputing the information.
  • Request deletion or correction.
  • You may also want to enclose a copy of your report with the disputed items highlighted.

Your communication may resemble the following example:

Sample Letter of Explanation to Dispute Credit Report


All three credit bureaus now accept online filing of disputes. Experian only accepts online submissions. When disputing inaccurate information, inform the credit bureau in writing. Include supporting documents as copies, not originals.

You may consider enclosing a copy of your credit report with the disputed items circled. Send your letter by certified mail with a return receipt requested to have proof of the credit bureau receiving your correspondence. Keep copies of your dispute letter and any enclosures.


Your Name

Your Address

Your City, State, Zip Code

Complaint Department

Name of Credit Bureau


City, State, Zip Code

Dear Sir or Madam:

I am writing to dispute the following information in my file. The disputed items are circled on the attached copy of the report I received.

This item (identify item(s) disputed by name of source, such as creditors or tax court, and identify type of item, such as credit account, judgment, etc.) is (inaccurate or incomplete) because (describe what is inaccurate or incomplete and why). I am requesting that the item be deleted (or request another specific change) to correct the information.

Enclosed are copies of (use this sentence if applicable and describe any enclosed documentation, such as payment records, court documents) supporting my position. Please reinvestigate this (these) matter(s) and (delete or correct) the disputed item(s) as soon as possible.


Your name

Enclosures: (List what you are enclosing)

When mailing a letter, send it by certified mail with a return receipt requested to document the credit bureau receiving your correspondence. Additionally, retain copies of your dispute letter and enclosures.

Next, write to the relevant creditor or information provider, explaining that you are disputing the information they provided to the bureau. Include copies of documents supporting your position. Many providers have designated addresses for disputes.

If the provider continues to report the same information to a bureau, they must include a notice of your dispute. Request that the provider send you copies of any correspondence they send to the bureau. This process can take between 30 and 90 days.

In certain states, you may be eligible to receive a free credit report directly from the credit bureau after registering a dispute to verify updated information. Contact the appropriate credit bureau to inquire about this service.

How accepted disputes affect your FICO Score:

Correcting errors on your credit report often results in an improvement in your score. However, in some cases, correcting or updating credit information may not lead to an immediate score increase. For example:

  • Closing credit card accounts does not improve your score. Closed accounts remain on your credit report, and their payment history continues to be considered in your FICO Score calculation.
  • Removing negative information from your credit report may not have the impact you expect if other negative information remains, preventing an immediate score increase.
  • Your FICO Score only considers credit-related information on your credit report. Changes to personal information, such as address, Social Security number, employer, or date of birth, do not affect the credit information on your report and are unlikely to change your FICO Score.

The credit bureau typically takes 30-45 days to respond to a dispute.

What if you disagree with the credit bureau’s investigation?

Credit bureau investigations do not always result in a favorable outcome. If that’s the case, request that the credit bureau include your statement of dispute in your file and in future reports. They can also provide your statement to anyone who received a copy of the previous report. There may be a fee for this service, but it can be worthwhile.

When you inform an information provider about your dispute, they must include a notice of dispute when reporting the item to a credit bureau during the investigation.

If the investigation does not produce the desired results and inaccurate information in your credit report is causing harm, you may consider seeking assistance from a lawyer as a last resort to resolve the dispute.

The key to success is to remain vigilant and persistent when reviewing, repairing, and correcting information on your credit reports.

Minimum requirements to calculate a credit score:

To calculate a credit score, your credit report must contain sufficient and recent information. Generally, this means having at least one account open for six months or longer and at least one account reported to the credit bureau within the last six months.

Minimum requirements for a FICO Score:

To receive a valid FICO Score, your credit report must have:

  • At least one account open for six months or more.
  • At least one account reported to the credit bureau within the past six months.
  • No indication of “deceased” on the credit report. Note that if you share an account with another person and the other account holder is reported deceased, it may affect you.

The minimum scoring criteria can be met by a single account or multiple accounts on a credit file. In rare cases, the qualification for a FICO Score may vary across different FICO Score versions.

Different scores at each credit bureau:

Due to the varying information each credit bureau has on file about you, your credit scores from Equifax, TransUnion, and Experian may differ. Sometimes the difference is minimal, while other times it can be significant due to errors or mistakes in your credit report. These discrepancies can potentially cost you thousands of dollars over the life of a loan. Regularly check your reports or sign up for alerts to be notified of changes in your score.

Your credit scores will change over time:

As the information in your credit report changes, so will any new credit scores based on it. The credit scores you had a month ago may not be the same as what a lender would obtain from the credit bureau today.

Other credit scores or FICO Scores?

While there are other credit scores available to consumers, FICO Scores are used by 90% of top lenders. Other credit scores may evaluate your credit report differently. When purchasing a credit score for yourself, experts generally recommend obtaining a FICO Score since it is used in the majority of lending decisions.