Credit basics: understand and improve your score

Credit score ranges at a glance

Scores typically run 300-850. Lenders set their own cutoffs, but these bands are a helpful shorthand for what to expect.

• Excellent (800-850)

  Lowest APRs, highest limits, premium offers.

• Very Good (740-799)

  Competitive rates and smooth approvals.

• Good (670-739)

  Generally approvable; pricing varies by DTI and income.

• Fair (580-669)

  Fewer options; higher APR likely - focus on quick lifts.

• Poor (<580)

  Limited unsecured options; consider secured products and rebuild steps.

What drives your score

Five main factors shape most scoring models (FICO/VantageScore). Improve the biggest levers first.

• Payment history: On-time payments are the top driver. Avoid lates; set autopay for minimums.
• Utilization: Keep revolving balances low vs. limits (aim <30%, ideally <10%). Mid-cycle payments can lower reported balances.
• Length of history: Older accounts help. Preserve no-fee long-tenured cards.
• Mix: A healthy blend of installment + revolving can help, but don't open accounts just for mix.
• New credit: Batch applications; too many recent hard pulls can ding scores temporarily.

Fast wins before you apply (30-90 days)

• Lower utilization quickly: Pay down cards; ask for credit limit increases (without a hard pull) to reduce ratios.
• Fix report errors: Pull all three reports (AnnualCreditReport.com) and dispute inaccuracies with supporting docs.
• Avoid new debt: Pause new cards/loans unless necessary; keep inquiries clustered if you must apply.
• Set autopay + reminders: Protect on-time history and avoid accidental lates.

Building long-term strength

• Keep starter accounts open (if no fee): They anchor your age of credit.
• Use lightly, pay in full: Regular, low utilization with on-time payments builds a positive pattern.
• Plan applications: Time major credit events (auto, mortgage) so hard pulls are grouped and scores aren't dragged by new debt.
• Monitor regularly: Use free scores/alerts to catch surprises early; freeze reports if not applying soon to block fraud.

Credit reports: read, dispute, and track

• Get all three: Pull Equifax, Experian, and TransUnion reports for a full view.
• Match data to accounts: Verify balances, limits, status, and payment history; correct mismatches.
• Dispute properly: Include evidence (statements, letters). Follow up within 30 days; re-dispute with new evidence if needed.
• Track changes: After fixes or paydowns, monitor score updates before applying.

How lenders view scores when you apply

Scores are one part of underwriting. Lenders also weigh income stability, debt-to-income (DTI), collateral (if secured), and documentation quality.

• DTI matters: Calculate using our DTI calculator; aim for sub-36% if possible.
• Income proof: Pay stubs, W-2/1099, bank statements, tax returns for self-employed.
• Collateral (secured loans): LTV and asset condition affect pricing and approval.
• Hard pulls: Expect an inquiry at application. Prequalify first (soft pull) to compare offers.

Next steps: get credit-ready

Sketch a simple 30-90 day plan: lower utilization, fix errors, and avoid new debt. Then prequalify to compare APR + fees before you commit.

• Lower card balances and set autopay.
• Pull all reports; dispute inaccuracies with proof.
• Bundle any applications into a short window.