Empowered Credit Management: How to Check Your Credit Score

Why should I check my credit score?

Most adults who regularly interact with our modern credit-based economy will leave trails of information that hint at their ability to pay for future credit accounts.

Specifically, each time you pay a credit card, open a new line of credit or take out a mortgage, this information will be recorded by one of the three major credit bureaus (Equifax, Experian and TransUnion) and reported on your comprehensive credit report.

As you might imagine, these credit reports can get long very quickly. Because of this, the finance industry has shifted toward calculating a singular number that summarizes the net risk present in your credit report.

This is your credit score.

Businesses and financial institutions will then use your credit score (alongside your credit history) to decide whether to offer you a loan, sign a lease or engage in other actions that may be impacted by your credit.

Because your credit score is effectively a summary of your overall credit history, it directly correlates to the types of offers that businesses will present to you.

For example, individuals with a high credit score are more likely to receive favorable interest rates on loans because they present less risk of defaulting on the payments.

Similarly, individuals with a low credit score may need help taking out a loan or finding housing in a competitive market because they present a risk based on their financial history.

What is a good credit score?

Credit scores can range between 300 and 850 and generally fall into several different brackets depending on the relative health of your credit history:

• 781 to 850: Superprime
• 661 to 780: Prime
• 601 to 660: Near Prime
• 300 to 600: Subprime

The average American has a credit score of between 690 and 710 (depending on how the score is calculated).

Generally, you will begin to see a diminishing return of benefits on anything higher than 750. However, striving for as high a credit score as possible is still important to ensure you receive the best possible rate on any loan.

How are these scores calculated?

There are several strategies that businesses will use when calculating your credit score, each resulting in slightly different results.

The majority of lenders decide on credit approvals, terms and interest rates using either the VantageScore or the FICO scoring system.

This system will grade your credit history based on several factors, each with associated grading weights:

• Payment history (40%): Whether you make your payments in full and on time. Note that this is why late payments can have such a serious impact on your credit.
• Depth of credit (21%): The age of your credit accounts, including your average, oldest and youngest account age. This also looks at the types of credit you use, including revolving credit (credit cards, lines of credit) and installment loans (mortgages, auto loans, personal loans).
• Credit utilization (20%): How much credit you use in proportion to how much credit you have access to. Generally, credit utilization focuses more on sources of revolving credit such as credit cards.
• Balances (11%): The total outstanding balances of all your credit accounts.
• Recent credit (5%): The total number of credit accounts you’ve opened recently, as well as any hard inquiries on your credit. Generally, opening several new credit accounts close together is a red flag for lenders because it could indicate a change in your financial circumstances.
• Available credit (3%): How much credit you currently have available on your revolving credit accounts.

How to quickly and easily check your credit score online

Checking your credit score has come a long way since the model was introduced in 1989, with financial institutions collectively striving to make calculating credit scores as fast and as simple as possible.

In general, you can find or request your credit score in three common locations: a bank that has partnered with one or more of the three major credit bureaus, the three bureaus themselves or a third-party service that offers credit monitoring services for a fee.

Partner with a bank that will pull your credit score on your behalf

Some banks will partner with one or more of the three major credit bureaus to provide services related to your credit score in their online portals.

For example, at Associated Bank we leverage the VantageScore 3.0 system to help our customers check and monitor their score directly in their online banking dashboard.

Customers can quickly and easily see their scores by logging into their accounts without added fees or costs.

In addition to showing our customers their current scores, we’ve added features such as a score trends graph (where users can view up to 12 months of their score history) and a credit score simulator that will estimate changes to your score when you take specific actions.

If you’re curious about your credit score, your first stop should always be your bank’s online portal, as some may offer solution for checking and monitoring your credit. 

If your bank doesn’t offer a credit monitoring solution, you can also get one free credit report per year from the credit bureau of your choice (as detailed below).

Request your credit score and credit report directly from one of the three credit bureaus

Each of the three credit bureaus will allow you to request a free copy of your credit report and FICO score a few times each year.

Generally, all you must do to receive your score and report is make an account with each of the bureaus and fill out a web form or some quick paperwork so they can process your request.

However, because some banks (such as Associated Bank) provide you with your full credit report each month, it’s often recommended that you instead default to your bank’s integrated credit reporting options over manually pulling your report once a year (provided your bank has such a program available).

Sign up for a third-party service that will monitor your credit

Finally, you should note that there are numerous credit monitoring services and solutions that will help you track your credit score, either for a fee or as a way of presenting you with other services related to your credit (such as credit monitoring or debt consolidation solutions).

Much like how banks partner with the three major bureaus to pull your credit score each month, these services will draw from the same data to show you your score and how it changes over time.

Partner with your bank to keep track of your financial health and wellness

In summary, the fastest and easiest way to check your credit score is to log into your bank’s mobile app* or online portal, where you can find various tools for reviewing and managing your credit.

At Associated Bank, we’ve partnered with Experian, one of the three major credit bureaus, to provide our customers with a host of credit monitoring solutions.

From trend graphs and estimates of how a financial decision may affect your score to a wide array of educational materials about credit, we offer the tools and resources you need to make sound financial decisions.

If you have any questions about your credit score, or if you’re interested in opening an account with us to view your score, please reach out to us online or visit us at one of our local branches.

We’d be happy to discuss how our experienced local bankers can help you get on track toward your financial goals.