Credit scores affect so much of our finances. But do you know how credit scores are calculated? Or what a “good” credit score is? Let’s get started on understanding your credit profile — and how to strengthen it and make it work for you.
How your score is calculated?
Misconceptions exist about how credit scores are calculated, but it doesn’t have to be a mystery. Credit scores are based on several factors, including your payment history (which accounts for 35% of your score) and how much you owe on loans and credit cards (30%). Click here to Learn more about how credit scores are calculated.
How to check your score
When you apply for a loan, credit card, or other type of credit, you can be sure that the lender will check your credit score. So why not check your own score first to make sure there are no surprises?
Wells Fargo Online® makes checking your FICO® Credit Score easy — it’s free1 and updated monthly. Checking it never affects your score so check as often as you like. Discover more about how to access your credit score.
What’s a good credit score?
Once you know your score, you can see how it stacks up. Any credit score above 700 is considered a “good” score. A score at that level or higher will typically allow you to qualify for credit as long as you have enough collateral to satisfy the lender and your debt-to-income ratio, or DTI, isn’t too high (under 35% is ideal). If you’d like to improve your score, check out these tips for taking your credit from good to great.
