credit scoreYou’ve probably heard that credit can impact many aspects of your life, and you may have even heard of the correlation between your credit scores and love life, but do you actually know what a credit score is? While we’ve talked about the basics of credit reports before, it’s been a while since we’ve dug into the basics of credit scores. Keep reading to learn all about your credit scores, why they matter, how you can check them and more.

What is a credit score?

A credit score is used as a means to sum up your credit risk, acting as a numerical value expressing your creditworthiness level (e.g., the likelihood you’ll pay your bills on time). Each individual with any sort of credit history or credit account has three primary credit scores — one for each of the major credit bureaus (Equifax, TransUnion and Experian). These scores reflect how you manage your credit. Think of it this way: if your credit reports are progress reports, your credit scores would be your final grades. In other words, those who manage their credit accounts will have higher credit scores, while those who poorly manage their credit accounts have lower scores.

Credit scores are regenerated every time someone requests to see them. This means, depending on your financial behaviors, your credit scores can shift every time they’re generated, meaning they may be 720 for the first check and 780 for the second. Because credit scores are constantly changing, it is important to make sure they’re always treading in the desired direction — up.

Why you should care about credit scores

Credit scores have pull over various aspects of your life. While you may be thinking your credit scores only matter if you’re planning on applying for a new credit card, the reality is they matter all the time. It’s true that creditors and lenders use credit scores as decision-making tools to determine your interest rate or if you’ll be receiving credit, but your credit scores can also determine if you get approved for a home loan or if you get access to utilities, as those also require a credit check. As such, it’s in your interest to know how your credit scores are calculated and what you can do to keep an eye on them.

Aspects of your life that are influenced by credit scores

Credit cards, loans and interest rates

Most people already know this, but your credit scores are one of the many factors that determine whether or not you get approved for a credit card or loans. Additionally, your credit scores also determine what your card’s or loan’s interest rates will be. Your credit scores can also help decide what your credit card’s limit or total loan amount is, along with the terms of your loan. You should be aware that other factors, like your current debts and income, also play a role in deciding the account’s limit or terms.

Your personal credit scores’ impacts on your loan approvals don’t just pertain to personal loan approvals; they can apply to loans for your small business under certain circumstances as well. While there are business credit scores, which are essentially credit scores for your business, it’s not unheard of for these small businesses to lack a business credit history. If that’s the case, a lender will look at the owner’s personal credit scores when deciding whether or not they’ll be approved and the terms of the loan.

Where you live

Whether you’re looking for your first apartment, buying your third house or moving into a retirement community, your credit scores will probably play some role. That’s because landlords often request a credit check to make sure potential tenants have a reliable repayment track record. The same goes for retirement communities. If you’re a homeowner, your mortgage lender already completed a credit check during the application and underwriting processes. This credit check, along with a number of other factors, are used to decide how much your mortgage will be, if you’re approved, what your interest rate will be and more.

Your love life

Credit scores can also be significant when it comes to predicting a relationship’s trajectory, as a study by the Federal Reserve Board has shown that credit scores correlate with how well your love life goes. That’s not the only study showing a correlation between a couple’s compatibility and their credit scores, as our friends at Bankrate found that 42% of Americans indicate that knowing someone’s credit score could be the deciding factor of whether or not they’ll date that person. Long story short, your credit woes have an impact on your love life.

Access to services

Last but not least, it’s also possible for your credit scores to impact your access to different services, like utilities (e.g., gas, water or electricity) or top cell phone offers. Utility companies usually look to your credit scores or credit history or both to determine if you can open an account, depending on the company. If your credit scores aren’t high enough or your credit history isn’t long enough, you may have to pay a deposit, an amount that some utility companies determine based on your scores. Your credit scores can also impact your cell phone prices, as noted by T-Mobile, since some carriers determine who gets access to their best offers by looking at their prospective clients’ credit scores.

Are all your credit scores the same?

Before you go ahead and try to calculate your credit scores, you should know that different credit scoring models calculate credit scores using various systems. The most common types of credit scores are FICO, which claims to be used by 90% of lenders, VantageScore and CreditXpert scores. There are also industry-specific scoring systems, like insurance scores.

Even though there are diverse scoring systems, credit scores are usually calculated using a number of similar factors, including the types of credit accounts you have, your payment history, outstanding balance, credit history’s age and applications for new credit accounts. Depending on the credit scoring system that’s used, these factors carry varying degrees of weight in the score determination process. Additionally, these credit scoring systems associate credit score ratings (e.g., poor, fair, average, good and excellent) with different credit score ranges. For example, FICO and VantageScore both use a 300 to 850 credit scoring scale, but FICO rates scores above 670 as “good,” whereas VantageScore scores above 700 are classified as “good” scores.

While you may be overwhelmed with the different credit score models, the reality is that consumers don’t need to worry about all of these models. Instead, they should just make sure they’re in touch with scores from all three nationwide credit reporting bureaus: Equifax, Experian and TransUnion. Most creditors don’t report to all three bureaus, which means all three credit reports are not identical. Since differing credit report information may be used to generate each credit score, your scores usually vary, which is why you should check all your credit scores to know where they stand.

As mentioned above, different creditors will evaluate scores differently, meaning there are no hard and fast rules for credit scores. That said, some general guidelines for what scores mean are shown below. Keep in mind that other factors will also affect the type of credit you might be eligible for.

  • Excellent credit (over 750): you should be eligible for any type of credit you want at the best rates.
  • Good credit (around the 700s): you should be eligible for almost any type of credit, and you’ll usually get the best rates.
  • Average credit (670 or higher): you will be able to get most types of credit, but you may not get the best rates or products.
  • Below average credit (620 or higher): you will still be able to get credit in many cases, but you’ll have to pay higher interest rates than others.
  • Bad credit (below 620): you will have difficulty obtaining credit, and when you get it, your rates will be high.

How to check your credit scores

Although you’re legally entitled to three free copies of your credit reports every 12 months through, you will not be able to obtain your credit scores for free (it costs around $10 per score). If you want to check your credit scores, you have a couple of ways to get them. You can just pay the fees and obtain your scores from, but that could get expensive if you’re trying to track your scores’ progress. Additionally, you may be able to check one of your credit scores for free through your credit card, but keep in mind that this won’t show your whole credit picture, as we noted above. Another way to check your credit scores is to subscribe to a credit monitoring service. Our top-rated services not only provide you with all three of your credit reports and scores upon signup, but they also provide you with updates when something changes — that’s extremely helpful if you want to track your scores. What’s more, a number of these services offer free trials, which means you can test out the services and decide if they’re a fit for you — without paying a dime. Visit our credit monitoring service reviews to find a good fit for you.

How can you improve your credit scores?

Credit scores have a huge impact on your life, so it’s good to know where your credit scores sit and how you can improve. One of the first steps is to check your credit scores, as you can’t work on building them if you don’t have a starting point. Next, check your credit reports to determine what factors may be lowering your scores. Once you do that, you can work on improving whatever culprit — identity theft, credit reporting errors, late payments, no credit history or something else — is dinging your credit. After you’ve sorted out the issue on your credit reports (e.g., you paid off the outstanding debt or reported any fraudulent accounts), you should look to the future. Start by using your current credit cards responsibly, meaning you pay your bill on time, you only make purchases that you know you can afford to pay off and you avoid canceling your old accounts. After you start to see a bump in your credit scores, you can even try applying for a new credit card with better rewards and perks.

Credit scores impact your life in immense ways, so it’s important to make sure your credit scores are as high as they can be. Now that you know more about how credit scores affect different areas of your life, read our credit monitoring reviews to learn more about these services and find the best one for your needs.