- Your credit score: How it's calculated infographic
- What really goes into your credit score? video
- Want to boost your credit score? Break it down. infographic
- What's the difference between a credit report and a credit score? video
- What is a "good" credit score? video
- How credit scores affect interest rates video
- Your guide to key credit terms article
- KEY TAKEAWAYS
This is a record of how you’ve repaid your credit obligations, including loans, credit cards and some bills. The length of your credit history makes up 15 percent of your FICO score. So if you handle credit responsibly for 10 years, you might appear more desirable to lenders than if you have had credit only for a year.
Before extending credit, lenders and credit card issuers assess your creditworthiness— essentially your ability to repay your loan obligations. This is based on a number of factors, including the availability of your assets and your credit history, and could affect whether you receive credit or not.
This type of loan or debt doesn’t require you to make a certain number of fixed payments. Instead, you can repay the debt over time, or pay it back all at once and take out more money as it becomes available. Credit cards are the most common of example of revolving credit.
A type of loan that’s repaid over time with a set number of scheduled payments. The term could be anywhere from a few months to many years. A mortgage is a common example.
A hard inquiry occurs when a lender or credit card issuer contacts a credit bureau to check your report with the intent of extending credit to you. Hard inquiries might lower your credit score by a few points, so it’s best not to have too many hard inquiries all at once. (An exception would be inquiries from mortgage lenders or auto lenders; those typically count as a single inquiry if they occur within the same 30-day window.)
This occurs when a person or company (such as a potential employer) checks your credit. Soft inquiries are only seen by the person making the inquiry and do not impact your credit score. Checking your own credit is considered a soft inquiry.
The material provided on this website is for informational use only and is not intended for financial or investment advice. Bank of America and/or its partners assume no liability for any loss or damage resulting from one's reliance on the material provided. Please also note that such material is not updated regularly and that some of the information may not therefore be current. Consult with your own financial professional when making decisions regarding your financial or investment management.