Credit Scores | Credit Card Topics

What is a Hard Inquiry? Why Issuers Check Your Credit and What it Means for Your Credit Scores

By: Erica Sandberg, 11/21/2024

One of the more frustrating aspects of personal finance is that your credit score can decline after applying for a loan or credit card. How does that make sense? It's not right! And I agree. In some ways, it's not fair, and it definitely seems irrational. However, it's not as bad as it sounds. When you submit an application for credit, a hard inquiry will appear on your credit file and will be factored into your credit score. The same thing can happen when you request a credit... read more »

What is a Soft Inquiry? How Card Issuers Check Your Credit Without Affecting Your Credit Score

By: Eric Bank, 11/19/2024

Now, the softest inquiry I ever made was when I asked my sweetheart to marry me — about 47 years ago! But today, we are going to talk about something quite different: a credit soft inquiry. That’s when someone takes a gander at your credit without bringing down your score. A soft inquiry is a credit check that does not affect your credit score and typically occurs when you check your own credit or when a company preapproves you for an offer. You don’t have to get... read more »

What is Subprime Credit? How Credit Card Issuers Evaluate Consumer Risk

By: Marcie Geffner, 10/1/2024

Here’s a confession: I’ve never had subprime credit. Yet as a financial writer, I'm well familiar with credit issues and the difficulties poor credit can cause. With subprime credit, it may be difficult for you to be approved for a credit card, personal loan, or other financing. If you are approved, you'll likely be offered higher rates and less favorable terms than someone with better credit — not a great situation to find yourself in. Subprime credit is synonymous... read more »

What is a Credit Check? How Credit Card Issuers Determine Risk

By: Eric Bank, 9/23/2024

I’ve heard that several online dating sites advise singles to check their prospective paramour’s credit before making a match. It isn’t surprising to me that credit checks have become mainstream in this way. Credit reports are like personality X-rays. Not only can they reveal when something is broken, but they get to the heart of their habits — in this case, a person’s ability (or willingness) to pay their bills. A credit check involves accessing a credit report... read more »

What Does It Mean to Have No Credit History?

By: Eric Bank, 8/28/2024

I was born into this world pure, innocent, and without a credit history. By the time I depart, I will leave behind a lengthy credit history, telling the story of my financial journey — or at least the part devoted to credit cards and loans. Having no credit history means you have yet to establish any record of borrowing and repaying money with major credit bureaus. This can happen if you have never received a loan, used a credit card, or done business with creditors that report to... read more »

What Is a Credit Bureau? How the Agencies Help Credit Card Issuers Determine Risk

By: Eric Bank, 8/27/2024

For some folks, “bureau” has a vaguely negative connotation. After all, it is, by definition, staffed by bureaucrats, stereotyped as pencil-pushing, rule-following sticklers who are more interested in procedures than people. That seems a little harsh, and I’d like to think it’s untrue of the good people who work at the three major U.S. credit bureaus — Experian, Equifax, and TransUnion. These credit-reporting agencies make a huge difference in our financial... read more »

What is Excellent Credit? How to Build and Maintain a High Credit Score

By: Eric Bank, 11/5/2024

Excellent credit has many benefits, from bragging rights at the donut shop to being a lifeline during sudden emergencies. Excellent credit means having a high credit score, usually between 780 and 850, depending on the credit score model. An excellent credit score shows you pay your bills on time and manage your debts well. You typically get the best interest rates and loan terms if you have excellent credit. In all respects, having a high credit score is a good thing. ... read more »

What is a FICO Score? How it Impacts Lending Terms and Credit Decisions

By: John Ulzheimer, 11/14/2024

A FICO score is any score designed and developed by the company, Fair Isaac. When you think of the term FICO, think of Ford or Coke as comparisons. Many cars and trucks are sold under the Ford brand, and many sodas, waters, and other beverages are sold under the Coke brand. FICO is the same way. There are countless credit scores and other types of scores that are collectively referred to as FICO scores, but they are not all the same, just like all Fords are not the same. ... read more »

Do Credit Card Issuers Use FICO or VantageScore Credit Scores?

By: John Ulzheimer, 4/17/2024

The credit card is the default preferred method of payment for almost 200 million consumers, according to Experian. Thanks to most card-using consumers having more than one credit card, the number of cards in circulation as of Q3 2023 was “close to 569 million,” again according to Experian. Every single one of those cards is the result of an application, a credit report and credit score, underwriting, and then a decision by the card issuer. Given there are only two credit score... read more »

What Is a Credit Score?

By: Eric Bank, 5/14/2024

A credit score is a number, most commonly ranging from 300 to 850, that represents how likely you are to repay borrowed money. The higher the number, the more trustworthy lenders find you, and they use it to decide whether to give you a loan and what interest rate to charge. Credit card issuers design their products with costs and benefits specific to a range of scores. Credit scores are good for consumers because they make lending decisions more objective. ... read more »

Do Debit Cards Affect Credit Scores?

By: John Ulzheimer, 12/21/2023

TLDR: It depends on whether your debit card has an associated line of credit or overdraft protection and whether your debit card issuer reports such accounts to the credit bureaus. If your debit card does have overdraft protection or an associated line of credit, and the card’s issuer chooses to report it to the credit bureaus, then it can help your credit scores if the account is paid back on time, or it can lower your credit scores if it’s paid late or goes into default. ... read more »

1 in 4 Americans Believe Checking Their Credit Hurts Their Credit Scores

By: John Ulzheimer, 11/14/2023

Since the Fair and Accurate Credit Transactions Act of 2003, or “FACTA”, Americans have enjoyed the right to free annual copies of our credit reports. Now that it has been 20 years since we’ve had the right to freebies, it’s reasonable to expect most credit-conscious consumers to understand how pulling their own credit reports will impact their credit scores. But according to a recent survey commissioned by CardRates, 25% of consumers believe checking their own credit... read more »

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All articles tagged Credit Scores (12)