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Educate yourself with these 7 credit report FAQs:

How is my credit score created?

Every time you pay off debt, you improve or maintain your credit score. Every time you make a late payment, your score takes a hit. Every transaction or missed transaction affects your score, from utilities to credit card payments. Major purchases, credit card applications and delinquent payments could hurt your score—be extra careful during the mortgage process.

What is FICO and the three Credit Bureaus?

FICO is the system used to gather credit information, while the three bureaus (TransUnion, Experian and Equifax) are the data resources lenders use to determine your creditworthiness.

Why are my credit scores slightly different?

Each bureau calculates your credit using slightly different methods. Some of your credit history may not be recorded by one or more bureaus, as lending institutions report to each one at separate times. For a mortgage approval, the median score of the three bureaus is used.

What credit score should I aim for?

The FICO system calculates credit scores on a scale of 300-850. At Guaranteed Rate, FICO score will depend on the loan program and loan terms you are requesting. The minimum can range from as low as 550 for a VA loan to 620 for a conforming conventional loan and could be higher for larger loan sizes.

Who are my creditors?

Any banks or lending institutions that have loaned you money. This can include anything from credit cards and utilities to car payments and student loans.

What does my terms and payment amount refer to?

This tells you your amount and how many months you’ll pay until the balance is zero. If the account is a credit card, it’s considered revolving debt. This means it’s ongoing and you might not see any number in the box.

What do the number of months revolving refer to?

The number of months your account has been open. Late payments made on the account will be shown here under 30, 60 or 90 days late.

6 Credit Dos and Don’ts:

  • DO keep your credit card balances from running too high. Large amounts of outstanding debt can harm your score.
  • DO set up payment reminders via email or text. A history of on-time payments is a surefire way to improve.
  • DO target debts with the highest rates and the highest balances. Come up with a payment plan that fits your financial situation and takes aim at high-interest and high-balance debts to build your score.
  • DON’T move debt around. Shifting funds is not a solution. Pay it off as soon as possible.
  • DON’T open credit cards unless you actually need them. You could put your score in jeopardy.
  • DON’T close credit cards you haven’t used to give your score a quick boost. Closing cards can actually have the opposite affect and lower your score.