What Is Your Credit Score?

Any potential lenders may use your credit score to assess how likely you will repay before deciding if they will lend you any credit. There are three leading credit reference bureaus, Equifax, Experian, and TransUnion that hold information for lenders to view about you and enable them to make their decision.

Each of the credit reference bureaus will score you differently; therefore, you will not have the same score from each of them. As a rule, the companies will look at your debt level, how consistently you have repaid it, and whether there are missing repayments. But each bureau may look at different data than the other, hence the differing scores.

Financial institutions can view a raft of information in your credit file. This can include:

  • Current debt level
  • Bills paid consistently on time
  • Any missed repayments and when they were missed
  • Repeated applications for credit in a short space of time
  • Length of credit history

The criteria that lenders look at varies between each lender, as types of credit vary, such as banks, mortgages, credit cards or auto loans, etc. 

Lenders also look for affordability, so they will likely request your income and expenditures to check that you can afford to repay the credit.

Your credit score depicts what is in your credit report. Your credit score is viewed as a number, and scores can range from 300 to 850. There are many factors in your credit report that contribute to your score, and the higher your score, the better chance you have of being accepted for lines of credit. The lower your score means you may have difficulty getting credit or getting good terms on your loan, such as a lower interest rate

What makes for a good credit score?

  • Pay your bills on time, every time.
  • Pay any credit card balance in full each month.
  • Utilizing less than 50%, or even 30%, of your available credit (e.g., if you have a credit card with a limit of $10,000 but you owe only $2,000, you are only using 20% of your limit)
  • Paying any debts off as soon as possible
  • Keep a credit card with a zero balance open, even if you owe a small amount on another. If you close the account, it lowers your overall credit limit. For example, if you have two credit cards with a total limit of $5,000 each ($10,000 total) and you owe $5,000, you are only using 50% of your total credit limit. If you close one account, that now leaves you with a total credit limit of $5,000, and now you are using 100% of your total limit.
  • A long and well-managed credit history
  • Utilizing different types of credit such as a credit card (revolving credit), installment loans, a mortgage, etc. to show you manage your finance well

What affects your score negatively?

  • Consistently missing bill payments when they’re due
  • Applying to a lot of different lenders in a short space of time, making you look desperate
  • A short credit history
  • Bankruptcy
  • Not having had any credit and therefore no credit history available for lenders to decide if you are likely to repay them.
  • Any mistakes on your report will work against you, so be sure to check your report regularly and contact the lender or CRA if any changes are suspicious. 

Positive information can stay on your report for up to 10 years. Credit card accounts etc. (aka revolving credit) will be on your credit report for as long as the account is open, which, when well managed, improves your credit score.

Negative information, such as bankruptcy, may stay on your report for as long as ten years. Other types of negative information may be on your record for up to 7 years. 

As a rule, your repayment history is what lenders and creditors will look at to see how well you manage your finances. They can see if you pay on time consistently or if you have missed any repayments and how often this occurs.

You are entitled to a free credit report once per year. If you applied to one of the three bureaus every four months throughout the year, that means you will get three reports a year. You will be able to view what is on record about you by all of them. You can get your annual credit report here at Annual Credit 

Keeping a close eye on your reports can help build an understanding of your score and check that it is accurate and up to date.

© LendingWing. All rights reserved

The operator of this website is not a lender, loan broker or agent for any lender or loan broker. We are an advertising network service to independent, participating lenders and other advertising networks that may be able to provide amounts between $500 and $50,000. Not all lenders provide up to $50,000 and there is no guarantee that your request will be accepted by an independent, participating lender. This service does not constitute an offer or solicitation for loan products which are prohibited by any state law. This is not a solicitation for a particular loan. We do not endorse or charge you for any service or product. Any compensation we receive is paid by participating lenders or advertising networks and only for the advertising services provided. The offer you receive is based on the compensation we are paid and is not necessarily the offer with the best rates or terms.

This service and offer are void where prohibited. We do not control and are not responsible for the actions of any lender or advertising network. We do not have access to the full terms of your loan. For details, questions or concerns regarding your loan, please contact your lender directly. Only your lender can provide you with information about your specific loan terms, their current rates and charges, renewal, payments and the implications for non-payment or late payments. The information submitted by you on this website will be shared with one or more participating lenders or advertising networks. You are under no obligation to use our service to initiate contact with a lender, apply for credit or any loan product, or accept a loan from a participating lender. Cash transfer times and repayment terms vary between lenders. Repayment terms may be regulated by state and local laws. These disclosures are provided to you for information purposes only and should not be considered legal advice.

Some states have laws limiting the APR that a lender can charge you. APRs may range from 59% and 1386%. Loans from a state that has no limiting laws or loans from a lender not governed by state laws may have an even higher APR. The Annual Percentage Rate is the rate at which your loan accrues interest and is based upon the amount, cost and term of your loan, repayment amounts and timing of payments. Lenders are legally required to show you the APR and other terms of your loan before you execute a loan agreement.

Residents of some states may not be eligible for some or all short-term, small-dollar loans. Residents of Arkansas, New York, Vermont and West Virginia are not eligible to utilize this website or service. The states serviced by this website may change from time to time, without notice.

We do not make any credit decisions. Independent, participating lenders that you may be connected to may perform credit checks with credit reporting bureaus, obtain credit reports, or otherwise verify your Social Security Number. Typically, lenders may conduct a credit check through alternative credit bureaus to determine creditworthiness, credit standing and/or credit capacity. By submitting your information, you agree to allow lenders to verify your information and check your credit.

Loans provided by independent, participating lenders in our network are designed to be repaid within a short amount of time. Short-term loans are not a solution for long-term debt and credit difficulties. Only borrow an amount that can be repaid on the date of your next pay period. Consider seeking professional advice regarding your financial needs, risks and alternatives to short-term loans. Non-payment of your loan could result in collection activities. Late payments of loans may result in additional fees or collection activities, or both. Each lender has its own terms and conditions, and its own renewal policy. Please familiarize yourself with your lender’s policies for further information.