What Is a Credit Score?
- Excellent: 800 to 850
- Very Good: 740 to 799
- Good: 670 to 739
- Fair: 580 to 669
- Poor: 300 to 579
How to Improve Your Credit Score
When information is updated on a borrower’s credit report, their credit score changes and can rise or fall based on new information. Here are some ways a you can improve credit score:
- Pay your bills on time
- Up your credit line
- Don’t close a credit card account
- Use your credit card instead of debit card and pay your credit card on time. (“Credit Score”, 2021)
Credit scores and credit reports
Your credit report is a key part of many credit scoring systems. That’s why it is critical to make sure your credit report is accurate. Federal law gives you the right to get a free copy of your credit reports from each of the three national credit reporting companies once every 12 months.
How is a credit scoring system developed?
To develop a credit scoring system or model, a creditor or insurance company selects a random sample of customers and analyzes it statistically to identify characteristics that relate to risk. Each of the characteristics then is assigned a weight based on how strong a predictor it is of who would be a good risk. Each company may use its own scoring model, different scoring models for different types of credit or insurance, or a generic model developed by a scoring company.
How to Order Your Free Report
An amendment to the FCRA requires each of the nationwide credit reporting companies — Equifax, Experian, and TransUnion — to provide you with a free copy of your credit report at your request, once every 12 months.
The three nationwide credit reporting companies have set up one website, toll-free telephone number, and mailing address through which you can order your free annual report. To order, visit annualcreditreport.com, call 1-877-322-8228, or complete the Annual Credit Report Request Form and mail it to:
Annual Credit Report Request ServiceP.O. Box 105281
Atlanta, GA 30348-5281
Do not contact the three nationwide credit reporting companies individually. (“Disputing Errors on Credit Reports”, 2021)
Correcting Errors
Under the FCRA, both the credit reporting company and the information provider (that is, the person, company, or organization that provides information about you to a credit reporting company) are responsible for correcting inaccurate or incomplete information in your report. To take advantage of all your rights under this law, contact the credit reporting company and the information provider.(“Disputing Errors on Credit Reports”, 2021)
Sample Letter for Disputing Errors on Your Credit Report
https://www.consumer.ftc.gov/articles/0384-sample-letter-disputing-errors-your-credit-report
(“Disputing Errors on Credit Reports”, 2021)