The main factors involved in calculating a credit score are:
If you look at your credit scores based on data from each of the three nationwide credit bureaus – Equifax, Experian, and TransUnion – you may see three different scores. This is completely normal. Your scores may not all be the same because not all creditors and lenders report to all three bureaus. Many creditors report to all three, but you may have an account with a creditor that only reports to one, two, or none.
There are many different scoring models used to determine a credit score. Here is a general breakdown of the factors used to calculate your Equifax credit score:
Credit card companies, mortgage lenders, and insurance companies pull credit scores to use as one of the factors to determine your creditworthiness or credit risk.
Financial services companies tend to group borrowers into segments according to their credit score. These credit score ranges may determine how much you’ll be charged for your insurance coverage, the interest rate you will pay on your mortgage, student loan, or automobile loan, or the type of credit card you’ll be offered.
Credit reports are a summary of your credit history, reported to credit bureaus by lenders and creditors. They contain personal information to identify you; information about your credit accounts, like credit cards, mortgages, student loans, and vehicle loans; and bankruptcies. Credit reports are used by lenders as one factor in helping determine your creditworthiness.
Your consumer credit reports are available from the three nationwide credit bureaus — Equifax, TransUnion and Experian.
A credit report is a summary of your credit history, and certain other information, reported to credit bureaus by your lenders and creditors. Your Equifax credit report contains four types of information:
Soft inquiries may include your own requests for your credit report, inquiries by companies extending you preapproved offers for credit cards, or inquiries made by your current creditors who wish to perform a review of your credit (also known as “account monitoring”). “Soft” inquiries are only visible to you and not to potential lenders or creditors, and do not impact your credit score.
Hard inquiries occur when a potential lender reviews your credit history because you have applied for credit such as a new loan or credit card. These may remain on your Equifax credit report for 24 months. ”Hard” inquiries do impact credit scores.
There are time frames for how long different types of information may remain on your credit report.
There are a few ways to get your free credit reports. You are entitled to a free copy of your credit reports every 12 months from each of the three nationwide credit bureaus -- Equifax, Experian and TransUnion -- by visiting annualcreditreport.com. These reports do not include credit scores.
You can also create a myEquifax account and receive two free Equifax credit reports each year. In addition, you can click on "Get my free credit score" on your myEquifax dashboard to enroll in Equifax Core Credit™ for a free monthly Equifax credit report and a free monthly VantageScore® 3.0 credit score, based on Equifax data.
Another way you can receive a copy of your free credit report from the three major credit bureaus is if you meet one of the requirements listed below, as outlined in the Fair Credit Reporting Act. This law indicates that if you meet one of these requirements, you are entitled to one additional free copy of your credit file during any 12-month period:
If any of these situations apply to you, you can request your additional free copy of a credit report from Equifax by contacting us.
A credit score is a three-digit number, typically between 300 and 850, which is designed to represent your credit risk, or the likelihood you will pay your bills on time. In general, a higher credit score represents a higher likelihood of responsible financial habits. Credit scores are one of many factors used by lenders when determining your likelihood of paying back a loan.
Credit scores are calculated using the content of your credit report. Each of the three nationwide credit bureaus uses a slightly different method of determining your score.