What’s Considered a Good Number for a Credit Score?

I recently had a question from one of our loyal visitors, I thought it was a great Q&A to share and explore a bit, here it is:

“My credit score is 695. Is that considered a good number for a credit score?”
-John B. from Texas.

Short Answer: 695 is a “Fair” Credit Score

695 is considered by most to be a fairly good credit score, but not great. Any score below 700 could probably use some improvement. If your goal is to obtain a loan/mortgage with the absolute best interest rates lenders have to offer, then you will want to work on raising your credit score to at least 725, that’s where the “very good” range typically begins.

You probably got your Credit Score from the wrong place

First I should start by saying this: If you received just one credit score, and you don’t understand it – you got your score from the wrong place! The reality is that you have a total of 3 credit scores (one from each credit bureau), and if you’re checking your scores from a reputable source, they will provide detailed information about your credit score – such as why it is what it is, how it got that way, how you rank, what credit rating category your score puts you in, etc.

Having said that, I highly recommend getting All 3 Free Credit Scores from FreeScoresAndMore, not only will you get the full picture of how your credit stands, you will also have access to expert knowledge on how and why your scores are what they are, so you won’t have to ask this question again.

Next Step: Check All 3 Free Credit Scores →

How credit scores are determined

There are a variety of factors that go into how your credit score is determined, and there’s not just one general credit score for everything. However, according to myfico.com, the following is basically how your score is calculated based on your credit history, and how much weight each factor carries in the calculation:

  • Payment History – 35%
  • Amounts Owed – 30%
  • Length of credit history – 15%
  • New credit accounts – 10%
  • Types of credit used – 10%

The exact formula for calculating your credit score is top secret, but this may give you a good idea of what goes into the calculation.

Your 695 Credit Score could use a raise

As mentioned above, ideally you would want your credit score to be at least 725 (which is 30 points higher). Raising your credit score 30 points or more takes some time, how much time and how difficult the task, depends on your current situation. First you have to figure out why your credit score is low in the first place. If you’ve experienced an event such as bankruptcy, repossession, late or missed payments it might take a while for your credit score to recover from such a blow.

However, sometimes the culprit is an error on your credit report. Have you checked over your report thoroughly to make sure your creditors have reported your account and payment information correctly? For example, maybe XYZ Auto Finance Company erroneously reported that you had missed a payment a couple months ago? Errors do happen, be sure to check your report for any errors and get them fixed ASAP, and get your credit score back on track.

No errors, no bankruptcy…now what?

If there are no errors on your credit report, and no bankruptcy, repo etc., then what about your credit card balances? For the best credit score possible, keep your credit card balances low. What’s considered low? Keeping your CC balances 25% or less of your total credit line is a good guideline.

My CC balance is around 50% of my total credit limit, is that a problem?

Yes it is! Anything above 50% will drag down your credit score quite a bit. For example we’ll say you have two credit cards, one has a $3,000 credit limit, the other has a $5,000 limit. Your total “credit line” or “credit limit” on your credit cards would then be $8,000. If you carry a total balance on both cards of 4,000, your total balance would be occupying 50% of your total credit limit, this is not good for your credit score. If this sounds like your situation, work on paying down your credit card balances as much as possible.

If you cannot figure out why your credit score is low, it could be because you have too much debt such as personal loans, student loans etc. Or it could simply be that your credit history is too short. In any event, our credit score estimator may be able to help you figure out what is bringing down your credit score, give it a try.

Knowledge Is Gold when it comes to your Credit Score

Especially when you’re trying to improve your credit score, or even if you’re just looking to maintain the score you already have…learning everything you can about your credit reports and credit scores is as good as gold.

Follow these 3 simple steps to become your own “Credit Expert”:

  • Step 1: Get All 3 Free Credit Scores from FreeScoresAndMore (Comes with all 3 Credit Reports too, I’m a member, and I love it)
  • Step 2: In the members area after you receive your credit scores, be sure to review your credit reports thoroughly. Also be sure to play around with the different tools there, they are very educational.
  • Step 3: Once you’ve done that, you will be able to enjoy the benefits of daily credit monitoring of all 3 credit bureaus, as well as all 3 credit scores (updated monthly) so you will have access to 100% of your credit data 24 hours a day!

The knowledge you will gain from all the expert advice, credit tools, analysis, and on-going credit monitoring can do wonders in working towards your credit score goals.

Next Step: Get all 3 Free Credit Scores →

Credit Score Index

89 comments on “What’s Considered a Good Number for a Credit Score?

  1. Tracy

    My son is 31 he’s never had credit. He recently paid off 2.8acres of land with a trailer and a 2 car garage through contract for deed.He has every receipt and paid property taxes also.Can he get a loan from a bank to put a new trailer on property ?

  2. Mark

    Hi, I have a cc of 1000$ limit and I checked my score on equifax and says that I have score of 715 and everything looks good on my history no collection no late payment and my cc history is 8 month old , and I am wondering what’s the chance to get apple financing for a macbook of 1400$ ? Am I going to be approved ? And I know that I am going to pay it on time too

  3. Justin

    I had a score of 524 on the TransUnion and a 517 on Equifax…. I had some debt and I paid it off. Why does it show that I now have no credit? I’m confused because I thought it would have brought it up… why did it go down/away?

    1. Abraham

      Because you need to have a credit card with available funds associated to your name. There you’ve done it. Paid off all debt now you got a credit card with plenty off funds available. Your score with get higher because your debt to credit ratio will be lower and credit to debt ratio higher.

  4. Edward

    I’m considering purchasing a new vehicle. I currently have 8 years remaining on my home mortgage with a $18,000 balance…principle+interest=$337 per month. I have no other loans and no credit cards. My current three credit scores are 662, 651, 647. What is the best way to finance the new car? Auto loan? Re-finance home mortgage? Home Equity loan? Any advice would be greatly appreciated. Thanks.


    1. Jake Post author

      Edward, You might have to do some shopping around. For me, auto loans are the way to go because I can take advantage of the low interest rate offers. But with lower credit scores like you mentioned, you may not be approved for the best rates. You can always go to the dealer, do your haggling, and see if you’re approved for a low interest loan. If not, then shop around at that point before you actually make the purchase. Good luck!

  5. Bre

    My credit score is 510 I never had a credit I have a lots bills in my name that where not paid how do I fix that do pay those bills and my credit scores go up will that make s differences?

    1. Jake Post author

      First, check into getting some sort of credit card, even a prepaid card would help, just make sure they report your account to the credit bureaus. You need to establish some sort of credit history.

      As for your bills, yes if you can pay the bills, definitely pay them. But that will not remove the late payment history from your credit report.. for that, you will need to let time heal those wounds. But the quicker you can pay them the quicker you can start improving your credit score. Late payments on your credit report will remain there for 7 years, however the older they are the less they affect your credit score. So the quicker the better!

  6. Lucy

    So I just checked my credit report and I wanted to see when a cc was going to be removed because it has been almost 7 years, It showed that it was last updated in 2012. What doesn’t that mean?

  7. Abby


    I was out of US for almost 2 years. Missed a payment and it went into collections. I was never communicated. I came and got to know while i pulled a report. I have settled the $316 bill.

    Q1) How much time will it for delinquency talen off the report??
    Q2) How can I proceed to delete this issue completely from all the 3 bureaus??
    Q3) As I have been paying bills regularly for past 2 months, how much points should I be getting at the end of 3 months?
    Q4) How can I get a jump of 30 points or so in a month?

  8. Alexander

    Just checked my credit report and there is information on it that is old ( credit cards and/or loans from 1996-2002). Should I try to get those removed from my credit report? Do they have an adverse affect on my score? I also have a lot of student loans (deferred because I am still in school). Is this debt taken into account when determining a credit score? Also, there are several credit card accounts listed on the report; some have been closed at my request and some remain open. Should I ask to have these “closed” accounts removed from the report? Currently my credit score is 716 (Experian) and my husband and I would like to purchase a home. I have 6 credit cards (4 are bank cards, 2 are store cards) 2 of the bank cards are close to the spending limit, 1 store card has no balance and the other store card is less than 50% of limit. Should I close the store cards? How can I raise my score to at least 725????

    1. Shaniyah

      Anything on your credit report that over 7yrs can be deleted, so should call and have them removed.. And pay down any credit card balances. And don’t close any credit card because this will drop your score.. And if you can call your credit card company and get a credit increase this will help with credit cards that have a high balance.. And try never to miss a payment.. Good luck in your home purchase….

  9. Jamaljor

    I have been discharded from bankruptcy for almost 7 years, Equifax had removed my bankruptcy from public records after 6 years(current score 781), Transunion says they will remove my bankruptcy 7 years from the actual date, in a months time, (current score 771).

    My wife and I make good money between us as well.

    I would like to purchase a home for the first time. I have one credit card with payments made on time and all the time (over $3,000 limit). How likely is it that I will be able to get a home with my wife?, who has excellent credit scores as well.

  10. Jon

    Apparently my Transunion credit score is 736. This is way higher than I thought it would be. I make pretty good money but because of marital issues, I still find myself getting payday loans fairly regularly to pay the bills, I’ve bounced checks recently, my line of credit is maxed out, and my credit card is overdrawn. Also, I have virtually no savings or assets. I’m puzzled as to why my credit score isn’t a lot worse than it appears to be. Any ideas?

    1. SunShine

      Is the 736 a true Fico score or a Fako? What source did you use to obtain this information. Your true Fico scores can only be obtained from myfico.com or through certain companies like credit card companies or banks that offer customers Fico scores.

  11. ted

    After ch 13 in 2007 and including my home I took gigantic hit on credit scores. As of now after paying all bills and loans on or mostl before the due dates my scores are now from 689-699. I still see one negative on my report from Capital 1 for a cc included in ch 13. They are still using negative reporting to credit agency’s with a late payment dated in 2010. This was dismissed in ch 13 by court and I mde all court ordered payments and payed of 2 years early. How can they use 2010 date when account dismissed by court after2007 filing??

  12. Becky

    I have very little credit history, I only had a savings and checking account until I got married, (4 years ago) my husband has horrific credit, but I was able to be the co-signer for his college loans. We have made all of his school loans and my auto loan payments promptly. I closed a checking account last year and somehow, even though I had thought an over-draw was taken care of(it wasn’t)I had a collections notice sent to me, which I immediately paid, but my score is now 582. Would that one collections notice have taken my score down that badly? What can I do to get it back up as we are starting to look at buying a house?

  13. Charles Parker

    Recently I was unable to pay two credit cards that I had mantained and they trashed my credit score. It went from 687 to 534. I really don’t know how it could drop so quickly. They also show me not having a credit limit for long when I’ve bought a number of cars and used a number of finance companies in the last few years. Equifax did most of this on their own. I plan to payoff my pastdue credit cards and start over again. My score is nowhere where they have it and now I can’t borrow a dime because of them. I know there are a lot of companies out there that say they can fix your credit score, but I have been getting some bad reports on most of them. They charge an amount that is unbelievable and it usually takes longer than they say it will. I would like to get a bill consolidation loan and pay off all my bills so I can start new. I’m 53 years old with ahome and land paid for. I own two homes and would like nothing more than to just get out of debt. I only owe $22,000 total and would like to fix that. If you know of someone that could help me, please send them my way. I’ve been on my job for over 16 years and plan to retire from them. Hope you can help. I only need the money for four years more or less. Thank you!!!

    1. ken

      file bankruptcy and end this crap, if you try and consolidate with some debt co it could take you ten years and stay bad another 7 on your credit report so do’nt waste your time and money, i did filed in 2001 and now my credit score was as high as 816 , go find a paralegal that could save you a lot of money from some high priced lawyer

      1. Edwin J.Lane

        I agree with your advice to file bankruptcy. It’s done all of the time. And I agree with trying to find an affordable attorney to do the filing. There is nothing to be ashamed of in filing Chapter 7 bankruptcy.

    2. Maria

      Hi Charles,

      I found myself in a similar situation. My credit score dropped significantly 700+ to 525 due to a divorce and my Ex not taking care of his responsibilities.

      When I applied for a mortgage, it was denied. The loan officer recommended that I utilize a company to help me repair my credit. Instead I took matters into my own hands.

      I had difficulty requesting my free yearly credit report online. Therefore I subscribed to Identityguard.com (1st month free) and requested three free credit reports (Equifax, TransUnion and Experian) through them. After reviewing the reports I saw several delinquent accounts that had been turned over to collection agencies which I was unaware of. I paid off these debts totaling $400. I also requested a letter from the division of revenue showing that a State tax lien had been cleared.

      I sent a certified letter to the three credit reporting agencies along with the following documentation: 1) driver’s license, 2) bank statements (with my account number blacked-out) showing that the bills had been paid (highlighted in yellow) in full, 3) Letters from various collection agencies showing that the bills were satisfied, and 4) documentation that my Ex was responsible for delinquent bills. The entire process took me two days to complete.

      The reward for my effort was that Thirteen (13)days after sending my letters with documentation to the credit reporting agencies my credit score was back in the 700 range with Equifax and Transunion. Experian took a little longer. I was able to repair my credit in less than one month and was able to obtain my loan!

      I realize that my case is the exception and not the norm. For most individuals it may take a little longer to repair their credit depending on their circumstances/ issues which may be affecting their credit score.

      In closing I would like to say that the benefit of subscribing to a credit monitoring service like Identify Guard (there are several )not only helps protect your credit but also contain tools and tips to help repair your credit. I cancelled my subscription with Identity Guard before my trial period was over so it did not cause me a dime to utilize their service.

      The bottom line is that you can repair your credit yourself!
      Best Wishes.


      1. Doris

        Hi Maria:

        I read about your credit however just want to let you know you can
        go to credit Karma it is free. My credit score is also poor and they
        just sent me a email with all descriptions. Totally Free!!!


      2. Shaniyah

        You are so right you can do it yourself! People think u have to hire someone to help you clean up your credit… A little phone time foot work will save you lots of money..

    3. Jim

      You need to check out Dave Ramsey at daveramsey.com $22K in debt can easily be cleaned up if you learn how to budget and letting you dollars go to preplanned bill locations. You can also set up an emergency fund that will help avoid charging up more debt. Good Luck

    4. Michelle

      You could pull $22,000 worth of equity out of your property or re-finance and pay off that credit card debt, its the worst debt ever.

  14. Roxy

    I just found out for the first time that my credit score is 518. I have 4 things on my credit report. The car I just purchased a few months ago (at a really high interest rate from a buy here pay here place), a small loan for a car a purchase years ago and two delinquent bills. One of the delinquent bills I plan on paying as soon as possible and the other I never plan on paying (long story). I’ve never had a credit card.
    I got married a couple of years ago and unfortunately my husband’s score is a little lower than mine. What can I do (besides pay the delinquent bills) to raise my score?

    1. S

      Roxy…you will need to pay the bills on file, and/or dispute the one u don’t plan to pay if it’s not yours or u have another valid reason. Pay your new autoloan on time every time. See if you can go to a bank, or even better..a credit union to refinance your loan at a lower rate. I bought my first car (and stupididly financed with the car dealer) not realizing they assessed 22% interest!!!….I refinanced at a bank the next day for 6%. Try a few places if u get turned down. Also, open a small credit card…like at your favorite store (Kohl’s? Sears? Walmart? Express?) And start to build credit by using the card for a purchase here and there…and paying it on time. I’ve heard it’s best to carry a small balance when trying to build your credit. Do not exceed carrying a balance of more that 25-30% of your credit card limit. It will negatively affect you to do so. Have your husband also check his credit report for inacutacies and try to get a small credit card in his own name as well.

      Best of luck!

    2. mike andrew

      there is nothing you can do except pay your bills up to date and with only four accounts your score could go up pretty quickly, but you will need to “eat crow” and pay the one you say you won’t or get legally absolved from it, which in most cases is extremely difficult to do.

  15. Ryan

    Hello and thank you for the great responses you have been given to people.

    I am 21 and as of last month had a credit score of 780, have only been working steadily (self employed) for 2 years, I’ve had a bank account for around 5-6 years. Over the last 2 yearish I’ve took out a few of them pay day loans (over 5, under 10) always payed on time but last month I took one out, tried to pay a day early but their website was down, I sent an email explaining this and that I would not pay interest as it was their fault. Two weeks later I get a text telling me the amount I owe has gone up, I emailed again explaining the website was and was still down and I refuse to pay. Another two weeks another text, after that I emailed again to which I finally got a response saying this is your debt, pay it or we hand it over to a 3rd party. I should mention I tried phoning them during the first period was unable to speak to anyone (automated service) but they left details of their bank account. I did explain in the emails I was not comfortable paying this way and I was unsure how to.

    I got a letter and was told I need to pay the debt by such and such date or its over to a third party. The day before the end date I payed my original and agreed fee. A week or so later I got contacted by a third party trying to tell me my debt was £442. I went crazy as my original loan was £100, the original agreed payment to be paid two weeks later was £129 (which I payed when I got the letter) it then went to £153 and then up again finally to £188. After some words of anger from myself on the phone and also explaining what actually happened they agreed to settle it for £200 (still not happy) but all I need to pay is £71 as I’ve already payed £129. I am to pay the £71 Friday and then it is settled. But I went onto my Experian account where I get my credit details and it has gone down to 689! Why such a hit and how do I rectify this? Will it go back up after I’ve payed?

    Thank you for any help you may give.

  16. Quinn

    After not being able to find a job for a year and a half I started school full-time, where I am completely dependent upon student aid and my gracious room mates. When I was not able to make payments, my major credit card account was closed by the bank but it still continues to report on my credit, which I pay regularly with only a couple of late payments. I have avoided paying my credit cards completely off because I want to show that I can consistently make my payments, but now that I am down to the last 1000, I am up 30K in student loan debt. I plan to get one of those nursing jobs that pay off a percentage of the debt for 2 years of service, but I want when I am back in the market of working again for my credit to be awesome. When I am finished with nursing school, I should be around 60K in debt, what I want to know is what will that do to my credit score, since hopefully at that point, that will be my ONLY debt? So do I just pay down my cc and NOT close them? Are there any other things I can do as a student to bring up my credit score and then upon graduation?

    Thanks for your help.

  17. The Fladaboscan

    I was able to retire to do what I wanted at age 40 because I had NO DEBT except a mortgage, which is now paid off. Americans think debt is simply a way of life but it adds to the cost of living by a huge margin.

    My car is old and I don’t take fancy vacations but I get up most mornings when I want to and I do what I want. It’s a personal thing but I spend my time teaching people to play music and working for non-profits. So much more rewarding than the office work I did for 20 years.

    (Disclaimer: It helps that I have a lovely wife who is smarter than me and has a good job, but I wouldn’t have been able to quit working if I didn’t have any debt.)

  18. Marie

    I am trying to rebuild my credit and currently my scores are 596 596 and 563. I did have some public records listed but they have now been removed;except for Equifax and the reporting time has expired. Also, I have about five potentially negative items listed, no credit cards,no student loans and one repossession. I have tried to get a credit card to begin the process of repairing my credit history and score but have been unsuccessful with obtaining one. How can I get inquiries removed? How can I obtain a credit card to start rebuilding my credit?

  19. Grado

    In May 2012 score was 814, always pay off cc in full, low debt to income ratio. This month, score went down 36 points! Been pumping up cc to meet minimum spend for airline points but pay off each month. Accdg to your blog, this could be the reason for the drop. Anyway around this as pumping the cc for min spend is the only way I can do it. (For loading $ onto prepaid cards) thanks

    1. admin Post author

      Grado, yes that definitely could be the reason for the decline in your credit score. But your score is still pretty high even with the 36 point drop. Is there a specific reason you need to maintain an 800+ credit score? Generally from my experience when your score is that high it doesn’t matter much if it is 778 or 814, it will generally put you into the “excellent” range, that is if we are talking about a FICO or similar range that tops out at 850. I do something similar to that, I specifically put any expenses I can on my CC so I can get the reward points. It may cost me 20 points or so on my score, but the level my score is at now, it doesn’t knock me down into a less appealing credit rating. So if it makes financial sense for you, and your credit rating doesn’t suffer substantially… I’d just go with it!

  20. JC

    I just applied for a $30k loan w/ BOFA to do a lease buy-out on my ’09 Cayenne. I qualfied for an APR of 3.88% based on an Experian credit score of 838. I have always protected my credit rating by making sure I never missed a payment obligation. My credit report contains 21 accounts in good standing and no potentially negative items. My report shows that I held a number of credit card, paid the balance and that the account was then close at my request. I hold credit cards w/ limits of $50k, which is more dollars than I typically need, but it’s available if I do. While I think lenders give consideration to the total available limits of all credit cards, the thought being that if you maxed out all of your credit cards, you wouldn’t be able to repay their loan, there’s more weight given to a steady history of payments with no strikes for being a late payer. I’d heard that anything under 720 is a bad credit score. In any event, no credit is better than bad credit, so some good advice would be to not over-extend yourself and never fail to make at least the minimum payment on credit cards.

    1. mike andrew

      not entirely true. depending on age, some lending institutions would rather see some bad credit than absolutely no credit at all. they are very weary of “ghosts”.

  21. Harry

    I have a very basic question. When we discuss ‘credit scores’, which credit bureau score are we referring to? Is it one of the 3? An average of the 3? E.g. my scores are below. What should be “my score”?

    Transunion: 827
    Equifax: 708
    Experian: 737


    1. admin Post author

      Harry, that’s a big range between your scores. Are these scores all from the same source? I usually go by my FICO score from Equifax as “my score”, but for me all my scores are generally within the same range maybe give or take 10 points. Where did you get those scores?

    2. robert

      the three majors just give you your basic scores .but your fico score gives you the close over all bottom line that most lenders use .this is not just based off numbers but your whole credit payment history .all that plays into this is how long you had credit/were you ever late/what types of accounts you have/how much available credit/paying on time each have a certain percent that total up your fico.some folks three scores can be in the low 620s and 675 but there fico might tally up a 715 thats a fact that i on hand learned.

  22. Peter @ whatsagoodcreditscore

    Generally a good credit score is considered to be above 720. This is when you will receive the best interest rates. If you want a good credit score you should make sure to pay all your bills early, every time. If you can’t pay them all then at least try to pay more then the minimum payments. You should also never let your credit cards get maxed out. This tells the credit agencies that you are incapable of making your payments and are living beyond your means.

  23. lesey

    If I have several of charge offs and accounts in the collection, will my credit score improve and will the negative items get removed if I pay everything off. Btw I have two credit cards, that limit is $300 and and are closed to the max, I was planning on paying both of them off completely and just pay the interest or whatever each month, is that a good idead. Credit score is 545

    1. admin Post author

      Lesey, negative items like charge offs and collections will stay on your credit report for up to 7 years from the date it happened. I have heard of some cases where the items were removed by the creditor as a result of a direct request from the consumer, but either way those need to be paid off. Even if they remain on your credit report for the full 7 years, it will look much better if they have been paid, and the affect it will have on your credit score will diminish over time. They will probably affect your score the most within the first couple years, after that you may find that they don’t drag down your score nearly as much and you will look more favorable in the eyes of a lender.

      Aside from paying off your collection accounts, top priority should be to get those credit cards paid down. Keep in mind that even though you have a small total credit limit, it still looks bad that your CC’s are nearly maxed out, it’s all about the utilization percentage. Also, try to pay your CC’s off every month before the accounts are reported to the credit bureaus, they will typically report at the time they send your statement. So the balance/utilization percentage you have at that time is what will help determine your credit score.

  24. Brad

    Do you think that having a low credit card utilization or having a history of on time payments is more important to your credit score? I know they are both very important, but I’ve heard varying opinions. I suppose it’s easier to reduce your CCU if necessary – thoughts?

    1. admin Post author

      Brad, I don’t know if there’s a definite answer of one or the other to that question. But if I had to pick one as being more important I would definitely pick on time payments as the winner there. Personally I would rather lend to a person who has made ALL of their past payments on time, rather than one who misses payments occasionally, only to keep low CC balances. Personally, if I had to choose between making all my payments on time, or having missed/late payments in an effort to pay down my credit card balances, again, I would definitely choose making all my payments on time hands down.

  25. Jessica Austin

    My husband and I would like to buy a home in a few years and are trying to raise our credit scores, we have collection accounts with small amounts owed and some with more amounts that are owed. Is it best to pay off the small ones first or the big ones? Which would raise our credit scores faster? Also I was wondering when we go to get approved since I am a stay at home mom, does my credit score matter?

    1. admin Post author

      Jessica, personally I would pay off the smaller amounts owed first, simply because to me it would seem like I was getting somewhere quicker that way, rather than paying down the bigger ones first. As far as the affect it would have on your credit score, I can’t say for sure, but I would guess that it wouldn’t make much of a difference either way.

      Yes your credit score definitely matters when it comes time to purchase a home, assuming both of you will be applying together. Both of your credit scores will be pulled and basically averaged together. When my wife and I purchased our first home, she didn’t really have a credit history at all, luckily I had excellent credit, so we had no problem at all obtaining the mortgage. If I had less than stellar credit at the time, the result may not have been so favorable. I would definitely recommend checking out our recommendations for free credit score services, many of those offer useful tips and tools for raising your credit score. Good luck!

  26. Tom Kowalski

    I have recently paid off all outstanding debts, IRS, cars, CC, etc. My score is 638, it was 578. I have a charge off that will be coming off at the end of 2012. I want to rebuild my credit with CC for maybe just gas purchases. I also tried to get a loan last year, couldn’t even with a co signer. Now with everything paid off, will I have a better chance as the negative(except charge off) are gone. What is the quickest and best way to rebuild my credit and loan approval possibilities.

    1. admin Post author

      Tom, other than responsible use of your CC (keeping balance as low as possible), I would recommend checking out a local credit union and asking about a “credit builder loan”. It’s essentially a payment plan for putting your money into a savings account, except that the payments you make are reported to the credit bureaus so it looks more like of a personal loan, but your payments (minus interest of course) go into a savings account which you can withdraw at the end of the payment plan, which will probably be about a year. It’s great for building credit, especially if your credit is less than stellar, low risk for the lender, and great for starting some good savings habits!

  27. Dana

    I had a home that was short saled. It was sold the first month it was listed, but it took Bank of America 7 months to approve the sale. We moved across country and couldn’t afford to pay both the rent and the mortgage. I have no late payments on anything else for over 10 years. Once the mortgage was late, all my credit card companies slashed my credit limits to br $1,000 over what I owed. I went from a $15,000 credit line to $6,000. This happened on all my cards. Now my credit sucks!

  28. Erick

    Thanks Admin! Your advice is much appreciated and I will speak with my banking representative to see if I can get that credit builder loan. I didn’t realize that using my credit cards to the limit and then paying them off wasn’t the best approach. I will keep small balances on my credit cards and spend with mostly my debit cards. Hopefully another few months with this approach and I can get my credit score to a point where I can successfully apply for a home owners loan.

    Thanks again and I hope have a great holiday season.

  29. Erick

    Hello Admin. I’ve read through your comments regarding each person’s situation and I think you’re providing a great service here so thanks right off the bat. =)

    For my situation, I have about $20,000 in student loans which have been defaulted before. I’ve spent the last year getting it out of default and have paid on time this entire period. I’ve also gone through the painstaking work to pay off all other accounts on my credit report. Now, I only have the student loans and 2 credit cards, both $500 which I use and pay off completely, again, over the past year. I feel that I am doing my best to become responsible again and have recently gotten a credit score of 680. I would like to purchase a condo for my parents, targeting about $150K and have enough to pay $20,000 down.

    Some sites are telling me that my 680 score is considered “poor” and that I wouldn’t qualify for a bank loan to purchase this condo. What do you think I should do? I’ve been making payments, closing off bad accounts, and have been putting my financials together but it still seems that I can’t catch a break. My gross monthly income is over $4000 and I don’t have a car loan either.

    If you have any recommendations on what else I can do to help my CS, that would be much appreciated. Mahalo.

    1. admin Post author

      Erick, there’s something that I’ve just recently become aware of which might benefit your situation, it’s called a “credit builder loan”. I would check with your local credit union about this, essentially what they will do is grant you a short term loan for a small amount, something like $1,000, the amount of the loan will be placed in a CD or savings account (where it will earn interest), and you will make payments on it until it’s paid in full. At that time you can withdraw the money. You will pay interest on the loan, but it’s a much better option then going out and obtaining an installment loan simply for improving/building your credit. At least with this option you are actually saving money, even though you still pay the interest.

      It’s an excellent option for building/rebuilding credit, it’s very low risk to the bank, and helps you save money at the same time.

      Also if you have a significant balance on your your CC’s, make sure even though you pay them off every month, that you pay them before the card issuer reports the balances to the credit bureaus, to reduce your balance to total credit limit ratio. For example, if you charge $500 in any given month on your credit cards, and your total limit on both cards is $1000, it will be reported to the credit bureaus accordingly, so at that point your utilization percentage (balance to total limit) would be 50%, which will drag down your credit score significantly. Try to keep that percentage at or below 25% for the sake of your credit score.

      Other than that, time will be your best friend. As the negative items on your credit report get older, they will affect your credit score less and less, which means your score will slowly rise as more time passes. I hope this helps, good luck!

  30. Eric

    I purchased a vehicle a few years back, I was told that the Taxes were paid on the vehicle, turns out they weren’t, and the City put a lean in the vehicle, it was for $140 lousy dollars. I obviously paid the city, they released the lean, put it’s on my credit. how can I go about taking that off my credit? I seem to have lost the “lean release paperwork”. I think the lean is costing my 40pts on my credit score.

  31. Lea

    Currently my credit score is: Experian-704, Equifax-699, Transunion-695. When your score is pulled for buying a house, etc do they check one credit agency or all three? I have accounts on my credit report form over ten years ago but it states it was paid. Would having these closed accounts removed from my account help my credit score or not?

    1. admin Post author

      Lea, I’ve read that most mortgage lenders use all 3 scores and average them out, but keep in mind you don’t just have one credit score in the eyes of your lenders. Each lender may use an industry specific credit score, so even if they are using FICO as their scoring model, they may get a different credit score than what you see when you check your own score.

      For example, when applying for an auto loan, the lender may check an auto loan specific FICO score (I’ve heard it referred to as the “FICO Auto Industry Option Score”). If that is the case then it will be similar to the score you get yourself, but with additional weight put on your auto loan history.

      Even though the score you see, and the score they see, may not be exactly the same… it’s still important to check your own credit reports and scores before applying for a loan, to see where you stand. Also, if you go with a good credit scoring service, the system will typically give you tips and hints on improving your score, which could save you big money in interest.

  32. Jim

    I am trying to get approved for a mortgage. My current score is 614. I would like to get it up to around 725. I have 3 credit cards, all of which have low limits ($500, $500 and $1250) but were close to being maxed out. I also have 2 small personal loans ($1500 and $2000). I just paid off the 2 lower CC’s and i am going to pay the other CC off in the next month. I have never been late on any CC payments or my personal loan payments. How quickly should i expect my score to rise after paying of these CC’s. Is there anything else, other than paying off my CCs and paying on time, that i can do to help my score come up? Thanks in advance for any help!

    1. admin Post author

      Jim, your score should rise very quickly after paying off your cc debt, all it will take is for your credit card company to report the new balance(s) to the credit bureaus, something they will typically do every month at the time they send out your statement. So within a month or so after paying off your CC’s, you can expect to see the full benefit of having low revolving credit balances. Otherwise, without knowing the details of your credit report, it sounds like the best thing to do after paying down your credit cards would be just to keep making all your payments on time every month. If you think about it, I would love to hear how paying down your CC’s affected your score! Good luck!

  33. Kristi

    I had about 4 different loans in which I defaulted on then brought back up to good standing a couple months before I was able to consolidate those 4 loans into 1 loan which I haven’t been late on. I have a auto loan which I have never been late on but I have zero credit cards. My questions are will those 4 loans I defaulted on, was in good standing, then consolidated stay on my credit report for 7 – 10 years bringing down my credit score? My score right now is at 656, is there anything that can be done to bring my score up?

    1. admin Post author

      Kristi, unfortunately I don’t think there’s much to be done about the defaulted loans appearing on your credit report, time will heal that wound. But it’s good news that you have an auto loan which you pay on time every month, that will help you move forward. You might also want to consider getting a credit card, maybe one with a low limit, or a prepaid card (just make sure they report the account to the credit bureaus), that will help you show that you can manage your revolving debt responsibly, which plays a big role in calculating your credit score.

  34. Annie

    Another question – how soon can my CS grow up to the number it can be considered good, if I do all possible things to improve it?

    1. admin Post author

      Annie, It’s tough to say how soon your credit score can rise to a level that would be considered good, without knowing more specific details such as CC balances in relation to credit limit, bad items such as late payments, and so forth. I understand your credit is less than 2 years old, that’s a biggie. Without knowing any specifics, I would recommend obtaining some sort of credit card (if you haven’t already) which will report your account history to the credit bureaus, and go from there, while monitoring your score on a monthly basis. Keep paying your payments on time and keeping your credit card balance as low as possible. Keep an eye on your credit score, if it gets to the 680-700 range you will look much more attractive as a borrower than a credit score of 653 does.

      About your chances of obtaining an auto loan, that’s also very tough to say as well. With a score like that you’re not going to get an auto loan with any sort of competitive or “attractive” rates, but there is a chance you could still obtain an auto loan for a small amount, with a good down payment, the problem is the interest rate will probably be sky high. Sometimes this is the price you have to pay to start building good credit, unless you have the luxury of a co-signer with great credit.

      At this point I would recommend choosing a good credit monitoring service which updates your score every month, such as freecreditscore.com, and taking the advice and info their system gives you about increasing your score. You’d be amazed what you can learn about your score with some specific advice, even from an automated system!

  35. Annie

    I have a credit score of 653, but I need to buy a new car. The reason my CS is on a lower side is that my credit history is less than a year old – I am a new immigrant, which has been in the country for less than 2 years. How are my chances of being deined a car loan? I don’t want to apply without being sure I’ll be granted a loan, since applying for credit makes the score even lower.

  36. Jackson H

    I am trying to re build my credit as quickly as possible. I have two small amount credit cards that I defaulted on around 4years ago. I also have two small doctors visits I never paid. I have recently gotten a new $300 unsecured CC which was a shock and have kept the balance somewhat low and paid every month. I also had my family add me as authorized users user on 2 of their cards, which has reflected on a couple of the 3 bureaus. My question is, how likely is it for my score to go up a considerable amount by paying off the 4 charge off accounts (2 CC, 2 DR bills)? The amounts do not even total $2000, but I know they are killing me. I have paid off my car loan 2 years ago and want to buy a house and a new vehicle. I make plenty of money but being irresponsible 4-5 years ago are really hurting me now. How can I get my score fixed ASAP?

    1. admin Post author

      Jackson, I don’t personally have any experience with paying off collection or charge-off accounts, but I do know that those records stay on your credit for 7 years after the first delinquency, unless an agreement is made between you and your creditor that they will remove the record from your credit report in exchange for your payment.

      Unfortunately I can’t speculate on how much this could raise your credit score, but I would recommend plugging in different scenarios into our credit score estimator tool, that way you can get a good idea of how different actions can affect your credit score, check it out.

  37. Matt

    Working in corporate finance, I thought I was a smooth operator when I transferred all my student loans to credit cards. At the time (2005ish), credit cards were offering super low fixed rates and my private student loans (variable to prime) were skyrocketing. By paying off the loans with credit cards I was able to cut my effective interest rate in half. Then came the financial crisis of 2008…. I closed almost all of the credit card accounts to retain my low interest rates (otherwise, individual credit card rates would be re-negotiated to a high variable rate) but hadn’t accounted for how it would impact my credit score. As the accounts closed, my credit score plummeted. All my payments are made on time, no bankruptcy, no gaps in employment, and very very low debt to income ratio. I recently started making substantial payments to eliminate the credit card debt and every few thousand paid brings my credit score up. I’ve jumped 60 points in the past 45 days and lenders are raising my limits on my still open cards. I’m currently at 680 – if I keep this up, with all other items on my credit report in good standing, can I expect my score to continue to rapidly rise or will I eventually plateau? I’m trying to get to 725+

    1. admin Post author

      Matt, you can absolutely expect your credit score to keep rising by continuing to pay down your credit card balances. You will eventually plateau, but probably not until your balance compared to your total credit limit, gets down near 10%. It’s good for your credit score to have this percentage at or below 25%, but its BEST to have it at or below 10%. If your balance exceeds 50% or more of your total credit limit, that is terrible for your score and will drag it down significantly.

      So your goal here would first be 25%, then you will want to work toward 10%. Once you reach that point your cc balances will no longer be dragging down your score.

  38. Ashley

    I am a full time college student with a credit score of 703. I know that is a fine score but I am looking to bring it up a little.. maybe 25 points.

    I have a credit card with a $300 limit that I have recently stopped using. For about 2 years each month I was using almost the full $300 and paying it completely off before the payment due date. I haven’t had any late payments. I have about $12k in student loans and plan to take out a car loan soon.

    What can I do to bring my score up a little?

    1. admin Post author

      Ashley, it sounds like you are on the right track. My first question would be does your credit card currently have a balance? You said you stopped using it, so I’m assuming you paid it off, which is good for your score.

      Have you had an auto loan in the past, or will this be your first? If this is your first, assuming no bad items are appearing on your credit report, and your cc is paid off, there might not be much you can do to quickly improve your score.

      The reason your score is not higher might be due to lack of payment history, specifically for installment accounts. If your credit card and current student loans (which I’m assuming you haven’t started making payments on yet) are the only accounts showing up on your report, then obtaining an auto loan and making the payments on time for at least a year or so, should be a great help to your credit score.

      However, without a previous auto loan on your record, you may find it difficult to get a loan without a co-signer, or you may get one on your own, but with a higher interest rate. I know that is most likely the reason you want to raise your score before you apply (good interest rate) but unfortunately that is the price you pay for not having much of a credit history.

      My advice would be (if possible) to apply for an auto loan with a co-signer, hopefully someone with a good long credit history and great credit score. That way you can benefit from that persons great credit and it will help you build great credit as well. Good luck!

  39. Morgan

    I have recently discovered that 2 collection accounts have been showing up on my credit report. I started paying one and will continue until I pay if off. Currently my credit scores is a low 580. I am paying off a car loan (all paid on time) as well as other positive paid loans (Tv and computer). Here are my questions:

    1) How can I improve my credit?
    2) Would it be safe to apply for a major credit card? If so, will it help my credit score?
    3) How long does it take for the negativity to fade away after I pay off these collection charges?

    Thank you in advance

    1. admin Post author

      Morgan, sounds like you are on the right track. I would recommend applying for a prepaid credit card to start, just make sure the credit card issuer reports the account activity to the major credit bureaus, some don’t, check sites like creditcardguide.com for credit cards to suit your needs.

      Collections will stay on your credit report for 7 years after the last activity, but the negative affect those have on your credit score will diminish with time. For example, if they are brand new, it will bring down your score much more today, than it will 2 years from now. So time alone will help you out there.

    2. Edgard

      Get at least 1 but no more than 3 Secured credit card,used it for gas,groceries and minor transactions,pay the full balance off every month,try not to go over 50% on the credit limits and your score will go up like a Rocket in less than one year,i file BK chapter 7 and got 2 secured credit cards after my discharge,my score went up from 520 to 582 en six months,Capital one gave already a $250 unsecured over my $200 deposit and after a year they will increse again,make sure they report to the 3 credit bureaus,like capital One,First progress and merrick Bank.

    3. Edgard

      I forgot your other questions?
      Collections will stay on ur record for 7 years(From your last payment)if not paid, if you paid will show as Paid or Settle.
      Car loan wont help you much in your credit score,its a closed end loan,your score is more based in a revolving accounts like credit cards.
      A $10.00 payment every month in a credit card will help way faster to your score versus a $350.00 car loan payment.
      Banks like to see you have credit available,but they also want to see you dont need credit to survive, not to carry a balance is the faster way to increase your credit score.
      even if you dont use a secured credit card every month,those card still addin numbers to your score.

  40. Rhonda

    Hi, I am a Canadian who is now a US resident. In Canada I had a very high credit score. But have since married a US citizen with a lower credit score (about 8 months ago it was in the high 500’s, but we payed off ALLoutstanding loans and have opened a secured loan that we have payed down each month. We have also got a secured credit card and pay that off fully each month. In 6 months his score has gone up to 660. He still has a bankruptcy on his credit reports that is due to be taken off in January of 2012, as it is 10 years old. Will this bring his score up more once that is removed from his record? Do you know about how much something like that would add to his credit score? I’m asking this as we plan to buy a home next year, and I want to make sure we are doing all we can to bring up that credit score so we get the best mortgage rates possible. Thanks for any info!

    1. John

      Do you live in a community property state (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, Wisconsin)? If so, when you got married, you married his credit report too, because in a community property state, spouses share liabilities as well as assets. Other U.S. states do not have these rules.

  41. adam

    I am wondering what is the fastest way to improve my score? I am 18 with two department store cards n I always pay atleast 10 dollars more than the minimum payment and I’m never late. I had a capital one but I was allegedly slapped by there fraud system so I closed the account and paid in full. My current score is a 638, I have applied at everyother credit line issuer I can find and they all decline me for lack of credit history. I have the money to make the payments, I just can’t get approved. (I am a full time college student)

    1. admin Post author

      Adam, I would recommend keeping your CC balances very low. Even though it sounds like you make your payments on time every month (which is vital), you also need to keep your balance below about 25% of your total credit lines on those credit cards. Also the fact that you have applied for so many other accounts is a bad sign to creditors, each credit check lowers your score slightly, at least for a short time. Try to keep your inquiries to a minimum. Also, credit card issuers love giving credit lines to people who don’t look like they need it. Specifically people who use up a small percentage of their total credit limit. If your cards are maxed out, good luck getting more. One last thing, I really don’t want to recommend getting into more debt especially considering you are a college student, but just keep in mind creditors love seeing accounts such as auto loans on your credit report, provided you pay it on time every month. I wouldn’t recommend running out and getting an auto loan, unless you are sure you have the money to pay for it though. This is probably something to keep in mind after you graduate, and start building a better credit history.

  42. Garen

    The only one that can help you with your credit is you. Research before you construct a letter to be send to the collection agencies requesting that the bad credits that have drag your score down is yours.

    (This can work out assuming that you have found errors in your credit report). Another way to improve your credit score would be to open a new account with high credit limits but keeping your balances low by using only from 10% to 30% of available credit (Disciplining yourself to handle your finances wisely).

    But what if your credit reports are accurate? The only way out of your financial predicament is by finding ways to improve your credit score by first improving your financial behavior; after all you got to start

    If you have committed credit bloopers in the past you can still improve your credit score by paying them down on your credit balances. Pay your balances that are near their credit limit and next time does this more at an earlier time. Do not close a credit card account with a long credit history. Strike a balance by having sufficient credit accounts but not that many.

    Ultimately it will all boil down to bad credit rating means higher interest rates while good credit score can give you lower ones.

  43. Todd

    I have a credit score of 684 currently (due to a home retention program -use to be 720). I’ve been paying down most of my debt except for one card in particular. I’ve not been late on any other cards, mortgage, or auto loan (which will be paid off in two months). The one card that I’m having difficulty with I think I’m going to ask for a charge off amount…which they have already sent me an offer. How many points will this lower my credit score. Also, know that while I have not been paying them the minimum due I have always sent them a payment to keep the account out of collections which has worked.

  44. Jolina

    I had built up strong credit since I started. I had a 780 credit score and never had a late payment on any account. Unfortunetly last year, Due to litigation, I had to file for Bankrupcy. I have a few accounts closed but was never late on my history. I still have good standing open accounts. I’m trying to build my credit score back up. I saw I have a 682 current score. How can I build that back up quickly since I did get a very good job this year?

    1. admin Post author

      Jolina, sorry to hear about your troubles and having to file for bankruptcy. Number one is to keep paying your bills on time, be sure to keep low balances on your credit cards (if you don’t have one, get a prepaid card and make sure they report your payment history to the credit bureaus), and it always looks good on your credit report to have a mortgage which is paid on time every month. If you don’t have a mortgage, an auto loan will also help build your credit score back up.

      Sounds like you have good standing accounts already, whether they are credit card accounts or other loans, that is great news. Keep paying those on time and with time your credit score will rise. There’s really no quick fix, even though some may say there is. For most people the only quick/easy way to raise a credit score is to pay off any credit card balances. The lower your balance to credit limit ratio, the better your credit score will be.

      There’s also the option to have a co-signer on any credit/loans you may need. This can also help you build your credit score as the payment history will show up on your credit report. Just be sure, as it sounds like you have been in the past, to not take on any more debt than you can easily make the monthly payments on.

  45. patrick

    Every time I pay my credit cards down from a limit of say $18k
    to below 2k they set my new limit to 2k. It now looks like I’m up to my limit of 2k not less than 25%. I have several that do this every time I pay them off. What to do?

    1. admin Post author

      That’s an interesting situation you describe. First I would ask your credit card company to specifically not lower your credit line, and if it’s already lowered, ask if they will raise it. My guess is they are doing this to protect themselves against getting stuck with the debt rather than assuming you will pay it off. This could be a result of a bad/low credit score on your part, or maybe some negative items on your credit report which may throw up a red flag about your repayment risk. First thing to do is make sure your credit score is healthy (above 720 preferably) and make sure you make all your payments on time. If you got into some trouble in the past, time, and good credit management, will build up your good credit history again.

      1. John

        What’s “interesting” about it? That is the way the moneylenders operate. Once they suck you in, they are not going to let you go. We need legislation that requires FICO to be open with the method by which it conducts scores, and which subjects them to serious financial penalties for any false statements they make about people.

    2. Janet

      The exact same thing happened to me a few years ago on several different credit cards. One had a limit of $5,000 and I paid a lump sum of $3000 to pay it down. They then lowered my limit to the current balance. I thought I was doing the right and responsible thing. But now I have no savings, no available credit, and bad credit rating.


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