Fast Facts About Credit Scores and Reports.

Everyone knows you should be all adulty and check your credit report periodically. And if you've ever bought a house or a car, you know that piece of paper and the score attached is a big deal when it comes to getting a good interest rate. But what the heck is it, really? How do they figure out what your score is, and how can you make it better?

Here are some fast facts about credit scores and reports:

A credit report is a full history of your credit activity including balances, payment history, current and former names, employers and who has requested your credit information

Your credit report is used to calculate your credit score. That score is a measure of your creditworthiness. It’s not a measure of how much debt you have, but rather how well you have managed debt.

Scores range from 300 to 850, and there are two methods for calculation: FICO and Vantage

The average score in the U.S. is 716

Minnesota has the highest average score at 724.

You don't have ONE credit score. Your score will vary depending on what bureau is reporting and what scoring method they use

Three biggest credit bureaus: Equifax, Experian, Transunion

Score is based on 5 factors:

Payment history

Amount owed

Length of credit history

Credit mix

New credit

How to make it better:

Pay on time

Low balance on credit cards

Mix of loans and cards

Older / longer credit history

Minimal inquiries for new credit

Get a free credit report at annualcreditreport.com (currently, federal law is allowing for a free weekly report due to COVID)

If you find an error on your credit report, you should contact the bureau that produced the report (Equifax, Experian, Transunion) either online or by mail.

Staying on top of your credit report is a great way to be prepared when the day comes that you are looking to purchase a vehicle, property, new equipment or get credit for a new venture.

Drop a 👍 in the comments if you have checked your credit report in the last year!