Poor credit can make it difficult for you to buy a home, purchase a car, or obtain a loan. Your bad credit may not be your fault, but fixing the problem yourself is difficult. This is why credit repair companies are in business.
Credit repair companies work on your behalf to take negative items off of your credit report. These can include late payments, debt collections, and more. There are hundreds of credit repair companies out there, but we’ve created a list of the best credit repair companies for 2021.
Read our reviews for the best credit repair companies below!
Best 6 Best Credit Repair Companies for 2021
#1: Credit Saint: Best Overall Credit Repair Company – Our Top Pick
When compared to all the other credit repair companies on our list, we have chosen Credit Saint as our #1 best overall credit repair company. Credit Saint has an A+ rating on the Better Business Bureau website. They’ve been in business since 2004, so they’re definitely one of the best credit repair companies out there.
Services and Pricing
Credit Saint has three main services that offer varying degrees of credit repair: Credit Polish, Credit Remodel, and Clean Slate.
Credit Polish ($79.99 per month and $99 first-work fee) is a “medium” level of aggressiveness when it comes to credit repair. With this tier, Credit Saint offers challenges to the three major credit bureaus (Experian, TransUnion, and Equifax). In Credit Polish, they also offer:
- Score Analysis
- Creditor Interventions
- Score Tracker
- Challenge 5 inaccurately reported items per dispute cycle.
Credit Remodel ($99.99 per month and $99 first-work fee)is a “high” level of aggressiveness for credit repair. Credit Saint offers everything that the Credit Polish package has, with the addition of inquiry targeting and Experian monitoring. With this package, they can also challenge 10 inaccurately reported items per dispute cycle.
Clean Slate ($119.99 per month and $195 first-work fee), the highest tier of credit repair offered by Credit Saint, is the most aggressive of the three tiers. It’s also their most popular package. It offers unlimited challenges to the three major credit bureaus and cease & desist letters, as well as everything else offered in the other two tiers.
One of the best parts of Credit Saint is their 90-day money-back guarantee for all services. Credit Saint boasts on its website that you’ll see the first signs of better credit as soon as 45 days from the time you start using their service. However, if you haven’t seen any improvements within 90 days, the company will return your money, no questions asked.
It’s unlikely, but to take advantage of this 90-day money-back guarantee, you need to meet the following criteria:
- Have active participation in the Credit Saint program for at least 90 days
- Have no new trade lines to your credit report after your participation begins
- Have no debts to Credit Saint in the 90 days (late payments void the guarantee)
All in all, there’s a reason Credit Saint is at the top of our list. They have a level of customer service that pales in comparison to other credit repair companies. They also have a great money-back guarantee, as well as reasonable pricing. If you’re looking for a credit repair company but you’re not sure where to start, a great place is Credit Saint.
#2: Sky Blue Credit Repair: Best Value
Our next credit repair company on the list is Sky Blue Credit Repair. We choose this service for the “Best Value” category because they only have one plan with a set monthly price. For that price, you can get excellent credit repair services, amazing customer service, and of course, a clean credit report. Let’s dive into this review, starting with an overview of what they have to offer.
Sky Blue Credit Repair cannot remove debts from your credit report. However, they can remove several things that can negatively affect your credit score. These include:
- Late payments
- Hard inquiries
- And more.
Sky Blue Credit Services offers the same features as any other company, but the pricing schedule is much simpler.
As said before, the pricing for Sky Blue Credit Repair’s services is a simple monthly cost. It’s only $79 a month, you get no charge for 6 days, and (similar to Credit Saint) you get a 90-day money-back guarantee.
The initial setup fee is $79, then you pay $79 per month with the promise of no extra service charges. The first consultation is free, and you get a money-back guarantee during your first 3 months of membership. Simply put: If you’re not happy with their credit repair service, you can get your money back.
Sky Blue Credit is a great value for the money. For one low monthly price, you can get so many features (with no extra or piggy-back charging!).
#3: The Credit Pros: Best Guarantee
There’s a reason why Credit Pros has an excellent rating on the Better Business Bureau’s website (A+). Founded in 2009, they have developed a model that lets them have the best money-back guarantee in the business. First, the consultation is free and the process begins within less than a week. Then, they have a 90-day no-questions-asked money-back guarantee. Let’s go more in-depth about their services and their money-back guarantee.
Services and Pricing
The Credit Pros (TCP) offers different services with each pricing tier. Their top tier, which covers all of their services, is called the Success Package and includes (but is not limited to) the following:
- Full credit monitoring with all three bureaus
- One-on-one consultations with FICO professionals
- Unlimited dispute letters
- And more.
Their pricing schedule is a bit complicated, but you can find more information about it on their website. Next, let’s look at their money-back guarantee.
Their guarantee is so great that they have an entire webpage dedicated to it. They guarantee first and foremost that they’ll value, listen, and respond to their clients with understanding. They’re committed to providing 5-star client support, so they’ve implemented a great guarantee policy:
- You can cancel the service at any time
- Nobody will over-promise specific outcomes
- Your information is safe
- You’ll be treated with kindness and respect
- All your requests will be responded to promptly
The Credit Pros is a great service to go to if you’re looking for the best guarantee above all else.
#4: Pyramid Credit Repair: Best Customer Service
Customer service is important for any company. Credit repair services are unique in that most of the time, you’re working directly with a representative to get your credit back on par. Pyramid Credit Repair is a relatively new company, but they’ve established themselves as the company to beat when it comes to customer service.
Services and Pricing
Pyramid Credit Repair has two tiers of service: A Singles Plan ($99/month) and a Couples Plan ($198/month). Each one includes personalized service for either one or two people, a personalized game plan, 24/7 phone support, and no contracts (meaning you can cancel anytime).
You can also add on the “24/7 Protection Plan” in which you can monitor three scores and get reports for them, as well as get dark web monitoring and $25k in identity theft insurance. This option is $29.99 per month.
In terms of discounts, veterans and active duty can receive up to 20% off each month. Teachers can take advantage of 15% off each month as well.
Pyramid Credit Repair also has an in-house team of licensed attorneys ready to answer any questions you may have about the process. They also offer 24/7 phone support so anytime you need to ask a question (even if you’re not a customer) you can call.
Lots of reviews online state that they’ve got the best customer service in the business. This is why we recommend them if you’re looking for a personal touch for your credit repair services.
#5: Lexington Law: Best Legal Expertise
Lexington Law is a credit repair company that knows the ins and outs of credit repair. Composed primarily of real lawyers, they’re qualified to keep up with evolving laws in the credit industry. They also have an amazing dedication to keeping up with the federal standards. Let’s start this review by going over their services.
Services and Pricing
Lexington Law offers three tiers of service: Concord Standard ($89.95 per month), Concord Premier ($109.95 per month), and PremierPlus ($129.95 per month). In their highest tier, they offer bureau challenges, creditor interventions, score analysis, report watch, a FICO score tracker, identity protection, and personal finance tools. In their lower tiers, the features aren’t as comprehensive.
The first consultation with Lexington Law is free of charge and you have five days to cancel without penalty.
The fact that Lexington Law uses real lawyers is a BIG plus because you know you’re getting the best and most up-to-date knowledge in the business. During the first consultation, a representative will walk you through the services and features for each tier. Then, you’ll learn more about what you’ll need so you can decide on one plan.
Lexington Law is the best credit repair company to go with if you’re concerned about keeping up with the latest laws regarding credit repair.
#6: Ovation Credit Services: Best Cancellation Policy
Hopefully, once you’ve established yourself with a credit repair company, you won’t need to cancel your subscription. However, stuff happens and if you need to cancel, you don’t want to have to jump through hoops to make it happen. Ovation Credit Services by Lending Tree offers a no-risk refund policy that keeps you covered in case you need to cancel.
Services and Pricing
As with most credit repair companies, the first consultation is free. In terms of services, Ovation has two tiers: The Essentials and The Essentials Plus. The Essentials plan costs $79 per month ($89 first work fee) and includes everything you need for most standard credit restoration issues.
The Essentials Plus plan ($109 per month, $89 first work fee) includes everything from The Essentials with the addition of more cutting-edge components. This plan is better for those with more extreme or negative items on their credit report.
As said before, Ovation has an incredible refund and cancellation policy. They’re committed to building relationships of trust so you can cancel services at any time with no hassle or hoops to jump through.
Also, if they fail to provide the agreed-upon services to you, they won’t charge you. This makes cancellations so much easier since if they don’t complete what they promise, you won’t have to go through the process of requesting that money back.
We recommend Ovation to those who are skeptical of the credit repair process and want a simple way out, just in case the process doesn’t work. However, we believe that you won’t need to cancel your subscription because their service is amazing.
Frequently Asked Questions
We understand that you may have questions regarding credit repair. Here are some frequently asked questions that people often ask when inquiring about credit repair.
What is the best credit repair company?
As stated in our list, the best credit repair company overall is Credit Saint. They offer amazingly comprehensive services for a reasonable price, have stellar customer service and expertise in the area, and a great cancellation policy. Credit Saint is also the top recommend company by credit expert Steven Millstein of CreditRepairExpert.
Does credit repair really work?
Credit repair is not some magical way to raise your credit score, but it does work! First, credit repair companies work to find inaccurate information or mistakes on your report. Then, they contact the credit bureaus to report these errors for resolution. Once the inaccuracies are removed, it corrects your credit score and raises it.
How can I avoid credit repair scams?
Credit repair scams from sketchy credit repair agencies are becoming increasingly common. Here are some ways to avoid being deceived and find the best credit repair companies:
- Question the credit repair company thoroughly before giving them information. Make sure the representative you speak to can explain the specifics of the services and what they cost.
- Make sure they inform you of your rights, such as your right to get a written contract outlining what the arrangement is. Remember that you don’t have to ask credit repair agencies to dispute credit history errors; if they say you need them to make disputes on your behalf, you may want to consider a different company.
- If they ask you to misrepresent information, run. Some companies will suggest inventing a new credit identity for a new credit report; this is illegal.
How much does credit repair cost?
First and foremost, the cost of credit repair services varies based on whether you get a company to do it for you. Credit repair doesn’t cost you anything if you do it yourself. However, if you choose to get a company to do it for you, you can expect to pay between $20-200 per month. This cost changes based on the level of service and the company you choose.
How long does it take to repair your credit?
The time it takes to repair your credit varies based on how many errors are on the report. If it’s just a few errors, it can take around two to three months. If there’s more than just a few errors or the errors aren’t small enough to be resolved quickly, it can take between six and nine months.
Are credit repair companies worth it?
Credit repair agencies are worth it if you don’t have the time, energy, or resources to fix your credit yourself. You can dispute credit history errors yourself without a company. If you’re too busy or the process is too difficult to do without the help of professionals, however, it’s worth it to get one of the hundreds of credit repair agencies to do it for you.
Bad credit can be scary. It can affect your ability to buy a home or car, take out a loan, or even get a job. However, bad credit can be fixed. Disputing inaccuracies on your credit report yourself is possible, but it’s worth it to hire a company to act on your behalf. This way, the company is the one hounding the credit bureaus to fix their mistakes while you can sit back and watch your score get corrected.
These are just a few of the top credit repair agencies out there, but they’re among the best and you can’t really go wrong with Credit Saint or Sky Blue. We’re certain that with our guidance and comprehensive list, you’ll be able to make the best, most educated decision possible for which company to select for your needs.
Cheapest Car Insurance in Alaska 2021
With fewer than 550,000 drivers in 2018 reports, Alaska has the third-fewest drivers in the country. The natural beauty of mountains, glaciers and waterways in America’s Last Frontier are gorgeous to behold but can quickly become treacherous in the wrong conditions. It’s critical that as an Alaska resident, you have the right kind of car insurance to protect you before you get behind the wheel.
The cheapest car insurance in Alaska
The average cost of car insurance in Alaska for a minimum coverage policy is $340, while a full-coverage policy costs $1,484 per year. Just like any state, there are some companies that are more affordable than others when it comes to the cheapest car insurance in Alaska. The five cheapest car insurance companies based on the average annual premium for minimum coverage are USAA, State Farm, Geico, Progressive and Allstate.
|Car insurance company||Average annual premium for minimum coverage||Average annual premium for full coverage|
Allstate offers excellent options for coverage, including roadside coverage, sound system insurance and a personal umbrella policy. Although it scores only average for customer satisfaction, there is 24/7 claims service with a Claims Satisfaction Guarantee for extra peace of mind. There is an early signing discount when you renew early, plus other discounts for things like automatic withdrawal, early signing and full-pay.
Geico is an affordable option that is available in all 50 states. There is personal injury protection coverage, rideshare insurance and mechanical breakdown insurance, with the option for gap insurance for leased vehicles only. To help you save some extra money, there are a ton of discounts available, like military, federal employee, defensive driver and multiple vehicle. When it comes time to manage your policy, Geico helps with fantastic mobile tools to help you manage your policy.
Progressive gives you plenty of ways to save extra money on your policy with excellent discounts like continuous insurance, good student, homeowner and online quote discounts. It also rewards safe drivers with discounts through its Snapshot® program. Coverage options are generous, as well, including roadside assistance, gap insurance, custom parts and equipment coverage and a deductible savings bank.
State Farm is great for accessibility, giving you options for phone and agent support with excellent mobile tools. It holds an A++ (Superior) rating from AM Best for financial stability, so customers can feel secure in the claims process. Coverage is excellent, too, offering exclusive coverage options like emergency roadside assistance, rideshare insurance, sports car and classic car insurance. State Farm welcomes customers with a host of discounts for extra savings, like safety discounts for passive restraints and anti-theft technology, with a special Drive Safe & Save discount for safe drivers.
USAA is the best pick for cheap car insurance in Alaska for military members and their families. It has a strong car insurance program that offers its membership low rates and expansive coverage with plenty of discounts. It’s a company known for excellent customer service, consistently receiving top ratings for customer satisfaction. In addition to the option for personal injury protection (PIP), there are military-oriented discounts like savings for low mileage or when you garage your car on-base.
Affordable coverage for Alaska drivers
Alaska requires its drivers to carry a minimum amount of liability car insurance that includes the following coverage:
- $50,000 bodily injury per person
- $100,000 bodily injury per accident
- $25,000 property damage
- $50,000 uninsured/underinsured motorist bodily injury per person
- $100,000 uninsured/underinsured motorist bodily injury per accident
- $25,000 underinsured motorist property damage
According to the Insurance Information Institute, over 15% of Alaskan drivers do not have car insurance. If you were to have a collision with any one of these drivers, it could mean serious losses if you do not have the right car insurance to protect yourself. That’s why it is so important to carry at least the minimum amount of coverage required by law, if not full coverage.
How to get cheap car insurance in Alaska
There are several ways to save on your car insurance in Alaska:
- Shop around: Every insurance company prices car insurance differently, so it pays to gather quotes from multiple car insurance providers in Alaska.
- Compare providers: Compare the type of coverage offered, taking into consideration things like pricing, tools, financial strength and customer service.
- Take advantage of discounts: From safe driver discounts to discounts specifically for your school or employer, there are many ways to save money on your car insurance. Ask your insurance provider about what kind of savings could lower the price of your auto insurance in Alaska.
- Work on your credit score: The higher your credit score, the less risk you pose to insurance companies, so it pays to have good credit. There are some great options for car insurance for bad credit, but you are more likely to see additional savings when you have a good credit score to show.
- Increase your deductible: One way to lower your payments each month is to increase your total deductible. This means that you will have to pay more upfront if you experience a loss, but it still will lower your payments each month, making it more affordable for you to have insurance coverage.
Frequently asked questions
What is the best car insurance in Alaska?
For the best car insurance in Alaska, we recommend coverage from The Hartford, State Farm, Allstate and Geico. The best company for you may vary, based on things like coverage, price and credit score, but these four are the best places to start in your search for the best car insurance in Alaska.
What is the average cost of car insurance in the U.S.?
The average cost of car insurance in the U.S. is $563 per year for minimum coverage and $1,738 annually for full coverage car insurance. This is significantly more expensive than the average cost of car insurance in Alaska, which runs $340 for a minimum coverage policy and $1,484 per year for a full coverage policy.
Is car insurance required in Alaska?
Alaska requires that Alaska drivers maintain a minimum amount of liability car insurance that includes $50,000 for bodily injury per person, $100,000 for bodily injury per accident and $25,000 for property damage. Some counties in Alaska do not require car insurance, but if you intend on driving, it’s always a good idea to purchase car insurance to protect yourself.
Bankrate utilizes Quadrant Information Services to analyze rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Quoted rates are based on a 40-year-old male and female driver with a cleaning driving record, good credit and the following full coverage limits:
- $100,000 bodily injury liability per person
- $300,000 bodily injury liability per accident
- $50,000 property damage liability per accident
- $100,000 uninsured motorist bodily injury per person
- $300,000 uninsured motorist bodily injury per accident
- $500 collision deductible
- $500 comprehensive deductible
To determine minimum coverage limits, Bankrate used minimum coverages that meet each state’s requirements. Our sample drivers own a 2018 Honda Accord, commute five days a week and drive 12,000 miles annually.
These are sample rates and should be used for comparative purposes only. Your quotes may be different.
The Pitfalls of Buying Furniture With In-Store Financing
Furnishing your home can be expensive, and many shoppers find it difficult to cover the cost of doing so. To make these purchases more affordable for the average shopper, many stores offer qualified customers interest-free furniture financing. You also have other options available to you that aren’t offered by stores, like credit cards and personal loans.
How in-store furniture financing works
Many large retail stores offer bad credit furniture financing through store-branded credit cards and “buy now, pay later” furniture installment plans.
It’s fairly common for furniture retailers to offer a store-branded credit card with deferred interest financing plans, where you don’t get charged interest if you pay off the purchase in full within a set number of months. For example, you may be able to purchase furniture on your card and pay 0% APR for six months or longer, depending on the financing plan. But you could be on the hook for the interest you didn’t pay during the financing period — a phenomenon known as deferred or retroactive interest. Further, your APR will jump to 20% to 25% or higher, making repayment more expensive moving forward.
Here are a few examples of store-branded credit cards and their special financing options:
|6 furniture stores that offer financing|
|Retailer||Type of financing||Standard purchase APR||Special financing offer|
|Ashley Furniture HomeStore||Credit card||29.99% Variable||Deferred interest financing on qualifying purchases for six or more months.|
|Bob’s Discount Furniture||Credit card||28.99% Variable||Deferred interest financing on purchases of over $399 for six or 12 months.|
|IKEA||Credit card||21.99% Variable||Zero percent interest for six, 12 or 24 months on purchases of $500 or more for the IKEA Projekt card.|
|Conn’s HomePlus||Credit card||29.99% Variable||Zero percent interest for 48 months on purchases of $3,999 and more.|
|Value City Furniture||Credit card||29.99% Variable||Deferred interest financing on qualifying purchases for six or 12 months. Zero percent interest financing for 36 months with 36 equal monthly payments.|
|Wayfair||Credit card||26.99% Variable||Deferred interest financing for six, 12, 18 or 24 months on orders of $200 or more.|
Other furniture stores with financing options, including Wayfair, may offer point-of-sale loans through third-party companies like Affirm. These loans can come with a fixed APR of up to 30% with a short repayment term. This can be a good option if you prefer fixed payments, can repay the loan over the allotted term and qualify for an affordable APR.
Pros and cons of financing your furniture in-store
In-store furniture financing can be an affordable way to make your purchase — if you can pay off the debt on time. When it comes to store-branded credit cards, you’ll want to avoid deferred interest and the potentially high standard APR by paying off your debt during the special financing period. With point-of-sale loans, make sure the monthly payments and repayment term are feasible as missed payments can damage your credit.
Consider the following pros and cons of using in-store furniture financing before signing up for a new credit account or loan:
|In-store financing: Pros and cons|
You may qualify for 0% APR, if you meet requirements
In-store financing could be a good deal if you pay off the money you borrow within the zero-interest financing period.
For someone who doesn’t have enough savings to cover the furniture, it might make more sense to take advantage of a deal like this instead of tapping into an emergency fund. However, you’ll want to make sure you pay off the total debt before your term ends to avoid retroactively accrued interest.
You can get new furniture right away
With furniture financing available at checkout, you can apply for credit or a loan to pay for the items that you’ve been eyeing, even if you don’t have the cash on hand to purchase them.
The trick here is to make purchases that you can afford to pay off in a short period. Special financing offers on store-branded credit cards may only last six or 12 months, sometimes longer depending on the size of your purchase. Loans like those offered by Affirm may offer loan terms based on your purchase amount, as well.
Oftentimes, furniture retailers will work with a financial institution that issues in-store credit cards. If these credit companies report on-time payments to one or more of the three credit bureaus, you may find your credit score steadily increasing over time. Check with retailers before you apply for a card to see whether or not you can take advantage of this opportunity.
You may have to pay deferred interest
Store-branded credit cards with 0% APR special financing offers come with deferred interest. That means interest accumulates on your principal during the financing period, starting from your original date of purchase. If you own a credit card with a deferred interest offer and don’t repay your entire principal amount before the financing period ends, you may find yourself owing hundreds of dollars or more in these retroactive interest fees.
Store credit cards have high standard purchase APRs
On top of owing deferred interest going back to the beginning of the date of purchase, the credit card company will continue to charge interest until you repay the full amount owed.
Remember that in-store credit cards carry high interest rates — higher than a typical credit card’s interest — so once the regular APR kicks in and you’re hit with all the deferred interest charges, the charges can rack up rather quickly.
May need good credit to qualify
People with bad credit or no credit might not qualify for furniture financing, since many stores require that you sign up for their partner bank’s credit card in order to do so.
But here’s the thing: Even the act of applying for new credit can temporarily ding your credit score. For that reason, make sure to ask the store if it offers prequalification, an approach that assesses your creditworthiness without conducting a hard credit pull. You can get a good idea of whether you’ll get approved for financing, without hurting your credit score in the process.
Alternatives to in-store financing
Budget, save up cash and pay upfront
If you want to buy furniture, you’ll end up paying for it one way or another. So instead of getting a furniture loan, you might consider saving up the cash to pay for it.
This strategy will keep you from the risk of having to pay high interest retroactively if you can’t repay the loan within the promotional period. You’ll also own your furniture sooner and pay less for it in the process.
Go to a rent-to-own furniture retailer
Rent-to-own furniture stores offer affordable installment payment plans for those who need it. With a rent-to-own plan, you can walk in and buy the furniture you need immediately, and gradually pay for ownership over a predetermined number of weeks or months.
Rent-to-own furniture retailers often don’t require credit checks, and you have the freedom to end your contract at any time. However, rent-to-own payment plans can be much more expensive than if you bought the furniture on credit or cash outright.
If you have other options available to you, you may want to consider them instead as you’ll likely save more money with those choices. However, rent-to-own plans may be a good alternative for those who need furniture immediately but don’t have the cash upfront, or for those with bad or no credit.
Use a credit card with a 0% APR promotional offer
If you’re able to land a credit card with a 0% introductory APR, chances are its terms will be better than the ones a furniture retailer can offer you. Even if you only qualify for a regular credit card, they’ll usually still carry a lower interest rate than retail store cards, which can save you a bundle if you’re left making furniture monthly payments after the promo period ends.
If you’ve got a credit card offer with a 0% percent introductory rate on purchases, compare its regular interest rate with that of the furniture store credit card. Make sure to choose the lower-cost option, in case you cannot pay off the balance by the time the promotional period is up.
You could use a personal loan to finance furniture purchases. This option comes with a set repayment schedule, fixed interest rate and relatively quick approval process. Depending on the lender, you could borrow as little as $1,000 or as much as $50,000 or more.
However, lenders will conduct a credit check on all applicants so you’ll want to have good credit or better to qualify. The best repayment terms are reserved for those with excellent credit, although those with a good credit score can still land attractive offers.
Unlike credit cards, though, you won’t find lenders offering 0% interest on personal loans so you’ll pay more than you would if you paid with cash upfront. To save as much money as possible, carefully weigh the offers you receive and calculate your savings with each before you make your decision.
Compare multiple lenders at once with our comparison tool below:
As low as 2.49%
Minimum 500 FICO
LendingTree is not a lender. LendingTree is unique in that you may be able to compare up to five personal loan offers within minutes. Everything is done online and you may be pre-qualified by lenders without impacting your credit score. Terms Apply. NMLS #1136.
As of 17-May-19, LendingTree Personal Loan consumers were seeing match rates as low as 2.49% (2.49% APR) on a $20,000 loan amount for a term of three (3) years. Rates and APRs were based on a self-identified credit score of 700 or higher, zero down payment, origination fees of $0 to $100 (depending on loan amount and term selected). Terms Apply. NMLS #1136
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Why Are There Different Types of Credit Scores?
You probably know that you should be checking your credit score on a regular basis—but which credit score should you check? Do you need to know both your FICO credit score and your VantageScore, or is checking one credit score enough? How are FICO and VantageScore different from each other, anyway—and why are there multiple types of credit scores in the first place?
Originally, there was just one credit scoring service, the FICO credit score, created in 1989. The three major credit bureaus (Equifax, Experian and TransUnion) developed VantageScore in 2006 as an alternative to the FICO score. Both FICO and VantageScore offer different types of credit scores depending on what kind of information lenders are requesting and which credit score model is being used.
What does this all mean for you and which credit scores should you be tracking? Let’s take a closer look at how credit scores work, the different types of credit scores and what you need to know about VantageScore versus FICO.
What is a credit score?
A credit score is a three-digit number that represents your creditworthiness. Lower credit scores indicate that you are more likely to be a credit risk, while higher credit scores indicate that you are more likely to be a responsible borrower.
Although there are different types of credit scores, the two main credit scoring models—FICO and VantageScore—use a 300-850 point credit scoring scale. Each credit score falls within a specific credit score range and helps lenders understand how you have used credit in the past and how you are likely to use credit in the future.
What are the main credit scoring models?
Most types of credit scores fall under two main scoring models: FICO and VantageScore. The differences between VantageScore vs. FICO are relatively minor, in the sense that a person with a good FICO score is likely to have a good VantageScore as well. Likewise, a person with a bad credit score under the FICO scoring model is probably going to have bad credit in the VantageScore model.
Here’s what you need to know about the different types of credit scores:
The FICO credit score was first developed in 1989 by Fair, Isaac and Company (now called the Fair Isaac Corporation). According to MyFICO, over 90 percent of top lenders use FICO credit scores to make lending decisions.
FICO offers many different types of credit scores. If you are taking out an auto loan, for example, a lender might check your FICO Auto Score. If you are applying for a credit card, a lender might look at your FICO Bankcard Score. If you don’t have much of a credit history yet, you can sign up for UltraFICO to have your banking activity factored into your credit score.
FICO regularly updates its credit scoring models to reflect changes in the industry and provide a more nuanced perspective of an individual’s creditworthiness, although these models can take some time to roll out. FICO recently released the FICO Score 10 suite, for example—but the FICO Score 8 model is still the most widely-used FICO credit score.
The FICO credit score ranges:
- Exceptional: 800-850
- Very Good: 740-799
- Good: 670-739
- Fair: 580-669
- Poor: 300-579
The VantageScore model was created in 2006 in a collaboration by the three major credit bureaus. Equifax, Experian and TransUnion created VantageScore as a way to provide an alternative to the FICO scoring model. Although VantageScore uses many of the same factors to determine your credit score, it weights these factors differently.
Under the FICO scoring model, for example, your payment history is the biggest factor affecting your credit score. Under the VantageScore model, your credit card balances and credit utilization ratio are the most influential factors in credit scoring.
Like FICO, VantageScore regularly updates its credit scoring models. The VantageScore 4.0 model, for example, became commercially available in 2017 and uses trended data to track changes in credit behavior over time. FICO’s Score 10 Suite also incorporates trended data into its credit scoring decisions—but VantageScore got there first.
The VantageScore credit score ranges:
- Excellent: 781-850
- Good: 661-780
- Fair: 601-660
- Poor: 500-600
- Very Poor: 300-499
Other credit score models
FICO and VantageScore aren’t the only two credit scoring models out there. Equifax, for example, has created its own credit scoring model—and unlike the 300-850 point scale used by the most popular FICO and VantageScore models, the Equifax model uses a 280-850 credit score scale.
Other credit score providers offer credit scores that might sound unique, but are actually based on the FICO or VantageScore models. When you check your TransUnion credit score, for example, you’re actually getting a credit score based on the VantageScore 3.0 model. The personal finance app Mint offers “free Mint credit scores,” but these are also based on the VantageScore model—Mint hasn’t created its own credit scoring system.
Check the fine print to learn whether your credit score provider is using FICO, VantageScore or some other kind of credit scoring model. If you’re looking for a free credit score, try to pick credit score providers that use FICO or VantageScore.
Why do you get different scores from different credit bureaus?
Sometimes, one credit bureau might give you a different VantageScore or FICO credit score than the other bureaus. If you make a large purchase that uses a significant percentage of your available credit, for example, your credit score is likely to drop until you pay off your high balance. But it might drop more quickly with one credit bureau than with the other two.
Why? Because each credit bureau is continually adding new information to your credit file—but the three credit bureaus don’t always receive the same information at the same time.
So if you check your Equifax credit score on the first week of the month, your Experian credit score on the second week of the month and your TransUnion credit score on the third week of the month, you might get slightly different scores depending on how your credit activity has changed over the past three weeks.
There’s one more reason why you might have different credit scores with different credit bureaus. If one of your credit reports contains an error, it could affect your credit score. Since millions of Americans have errors on their credit reports, it’s a good idea to review your credit reports with each bureau on a regular basis and dispute any incorrect information you find.
How credit scores are calculated
Credit scores are calculated by analyzing the information in your credit report and assigning a numerical value to the data. This three-digit number reflects your credit history and the way you use credit. It also lets lenders know whether you are likely to be a credit risk. If you have a history of on-time payments, for example, your credit score is likely to go up—but if you start missing credit card payments, your credit score is likely to go down.
Here’s how FICO and VantageScore credit scores are calculated. Note that FICO weights each attribute by a specific percentage, while VantageScore merely identifies which attributes have the most influence on your credit score.
How FICO calculates your credit score
- 35 percent—payment history
- 30 percent—amounts owed
- 15 percent—length of credit history
- 10 percent—credit mix
- 10 percent—new credit
How VantageScore calculates your credit score
- Extremely influential—total credit usage, balance and available credit
- Highly influential—credit mix and experience
- Moderately influential—payment history
- Less influential—age of credit history
- Less influential—new accounts
How to check your credit score
There are many different ways to check your credit score. Many banks and credit card issuers provide free credit scores to account holders, and apps like CreditWise® from Capital One and Discover® Credit Scorecard will let you check your credit score even if you don’t have a Capital One or Discover credit card.
You can also sign up for a credit monitoring service. These services not only give you updated credit score information, but also track your credit report for potential signs of identity theft. Some credit monitoring options are free, while others come with a monthly or annual subscription cost.
You might even be able to access your credit score through a budget tracking app. Mint, for example, offers users unlimited access to their VantageScore credit score.
Here are some of the best ways to check your credit score online:
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