Credit basics: the questions everyone starts with
Knox Credit Repair TeamJune 2, 20267 min read
Credit is simply getting money, goods or services now with an agreement to pay later. Everything else — scores, reports, bureaus, utilization — is infrastructure built to answer one question for lenders: how likely are you to pay it back? Here are the answers people actually ask us first.
What is a credit report versus a credit score?
The report is the record: your accounts, balances, payment history, inquiries and public records. The score is a number calculated from that record. Fix the report and the score follows.
Who keeps the reports?
Three nationwide bureaus — Equifax, Experian and TransUnion. They do not share data with each other, so your three reports rarely match exactly. That is why disputes often have to be filed with each one separately.
How is a score calculated?
Roughly: payment history 35%, amounts owed and utilization 30%, length of credit history 15%, new credit 10%, credit mix 10%. Weightings vary by model, but payment history and utilization dominate in all of them.
What counts as a good score?
On the common 300–850 scale: 800+ exceptional, 740–799 very good, 670–739 good, 580–669 fair, below 580 poor. Most mainstream approvals start opening up in the high 600s.
How long does bad information stay?
Most negative items: seven years from the date of first delinquency. Chapter 7 bankruptcy: ten years. Hard inquiries: two years, with score impact fading much sooner.
Does checking my own credit hurt it?
No. Checking your own report is a soft inquiry and has no effect. You can get free reports from all three bureaus at AnnualCreditReport.com.
How long until I have a score at all?
Generally about six months of reported activity on at least one account. A secured card or a credit-builder loan is the usual starting point.
The short version
- The report is the record; the score is a summary of it.
- Three bureaus, three separate files, three separate disputes.
- Payment history and utilization drive about two-thirds of your score.
- Checking your own credit never hurts it.
Want someone in your corner?
A free evaluation gets you a read on your report, a list of what looks challengeable, and a straight answer on what it takes.
More in Credit 101
- Which bills actually help build your credit?
Rent, utilities and phone bills usually do not reach your credit report — unless you make them. Here is what reports by default and what needs a service.
- 7 credit lessons to teach your kids before they leave home
Most adults learn credit by damaging it. Here are seven lessons, by age, that let your kids skip that tuition.
- The three types of credit and how each affects your score
Installment, revolving and open credit behave differently in scoring models. Here is what each one is and why your mix is worth about 10%.
This article is general information, not legal or financial advice. Knox Credit Repair does not guarantee any specific result or score increase. Accurate, timely and verifiable information cannot be removed from a credit report.