The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
If you’re considering taking out a loan or credit card, you’ve probably checked your credit score to weigh your odds of getting approved. But what if it’s different depending on which scoring model you check?
Since you have multiple types of credit scores, the number can vary based on the scoring model. Continue reading to learn more about the different credit scores, including FICO® and VantageScore®.
Table of contents:
What is a credit score?
A credit score is a three-digit number that predicts your credit risk based on data from your credit report. Lenders use credit scores to determine who to approve for loans and at what interest rates. Credit scores typically range from 300 to 800 points. A high credit score indicates that you’re more likely to pay back your loans, while a lower credit score signals that you may be a risky borrower.
What are the different credit scoring models?
FICO and VantageScore are the two most popular scoring models used in the United States. Both models calculate your score based on a set of factors that assess an individual’s credit risk. However, the two models use different algorithms and assign different weights to each factor.
Let’s look at the different types of credit scores and how they stack up.
FICO scoring model
The FICO score was the first consumer credit score developed by the Fair Isaac Corporation (FICO) in 1989. According to myFICO, 90 percent of top lenders use FICO scores to determine loan approvals, interest rates and credit limits.
A good FICO score will help you secure better loan terms and rates. The latest FICO model categorizes your score based on these ranges:
800+: Exceptional
740 – 799: Very good
670 – 739: Good
580 – 669: Fair
<580: Poor
VantageScore model
The VantageScore model was developed in 2006 by the three credit bureaus—Experian®, TransUnion® and Equifax®—as an alternative scoring model.
Like the FICO scoring model, VantageScore ranges from 300 to 850. According to Experian, here’s how the newest VantageScore model groups scores:
781+: Excellent
661 – 780: Good
601 – 660: Fair
500 – 600: Poor
<500: Very poor
Other credit scoring models
While FICO and VantageScore are the most widely used, they aren’t the only scoring models out there. Here are some lesser-known credit scoring models you may encounter:
TruVision Credit Risk: Developed by TransUnion, TruVision aims to broaden credit opportunities with insights beyond traditional credit information. The model combines “traditional, trended, blended and alternative data.”
OneScore: Unveiled in 2023 by Equifax, OneScore is a new scoring model aimed to paint a more comprehensive picture of loan applicants. According to a recent press release, OneScore is a “robust, multi-data score that leverages traditional credit history and differentiated alternative data.”
CE Credit Score: Created by CE Analytics, CE is an independent credit scoring model that uses advanced analytics and behavioral trends.
How are credit scores calculated?
Your credit scores are calculated based on a set of factors from your credit report. However, each scoring model assigns a certain weight to each factor to calculate your score.
Let’s look at how the FICO and VantageScore models calculate credit scores.
How is your FICO score calculated?
With the latest FICO scoring model, your history of paying past accounts on time is the most important factor when determining your credit score. Other factors include how much of your available credit you’re using, how long you’ve had your accounts, the different types of loans you have and how many new accounts you have.
Here’s exactly how FICO calculates your score:
Payment history: 35 percent
Amounts owed: 30 percent
Length of credit history: 15 percent
Credit mix: 10 percent
New credit: 10 percent
How is your VantageScore calculated?
Like the FICO model, payment history is the most significant factor when calculating your VantageScore. Additional factors include the age of your accounts, how much credit you use, total balances on your accounts, new accounts you’ve opened and how much credit you have available.
Here’s a look at the factors that determine your VantageScore:
Payment history: 41 percent
Depth of credit: 20 percent
Credit utilization: 20 percent
Balances: 6 percent
Recent credit: 11 percent
Available credit: 2 percent
Why are my credit scores different?
It’s normal for your credit scores to be different. Here are a few of the main reasons credit scores vary:
Your score is calculated using different scoring models: Your credit scores may vary because there are multiple different types of credit scoring models. Since scoring models weigh certain factors differently, your score may vary slightly depending on which credit score you check.
There are different versions of credit scoring models: Each scoring model has multiple versions that periodically update. For example, FICO 8 and FICO 9 have key differences, such as the impact of third-party collections and rent payments.
Not all lenders report to all three credit bureaus: Another reason your credit score may vary is because some lenders don’t report to all three credit bureaus. As a result, one of the credit bureaus could be missing information that either increases or decreases your score.
Credit scores update frequently: When you check your credit score can play a role in what number you see. Credit scores generally update at least once a month and sometimes even multiple times per month. So even if you’re using the same scoring mode, it’s normal for your credit score to fluctuate over time.
How to check your credit score
Accessing your credit score doesn’t have to be a hassle. Here are the easiest ways to check your credit score for free:
Credit bureaus: You can check your credit score via any of the three major credit bureaus—Experian, TransUnion and Equifax.
Your bank or credit card issuer: Most banks and credit card issuers provide customers with complimentary access to their credit score.
Third-party platform: Some third-party platforms provide free credit scores. For example, Lexington Law Firm provides a free credit snapshot, which includes your credit score and credit report summary.
Regularly checking your credit score and credit report can help notify you of inaccurate information that may be hurting your credit. If you notice errors on your credit report, it’s important to investigate and address them with the credit bureaus.
Learn how Lexington Law Firm’s services could help you effectively manage and monitor your credit today.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
Reviewed By
Alexis Peacock
Supervising Attorney
Alexis Peacock was born in Santa Cruz, California and raised in Scottsdale, Arizona.
In 2013, she earned her Bachelor of Science in Criminal Justice and Criminology, graduating cum laude from Arizona State University. Ms. Peacock received her Juris Doctor from Arizona Summit Law School and graduated in 2016. Prior to joining Lexington Law Firm, Ms. Peacock worked in Criminal Defense as both a paralegal and practicing attorney. Ms. Peacock represented clients in criminal matters varying from minor traffic infractions to serious felony cases. Alexis is licensed to practice law in Arizona. She is located in the Phoenix office.
The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
A credit privacy number (CPN) is formatted similarly to a Social Security number and is commonly used by fraudulent companies to scam people with bad credit. Using a CPN to apply for credit constitutes fraud, and they’re often tied to criminal activity.
A credit privacy number (CPN) is sold to consumers as a product to repair bad credit. In reality, these numbers can be associated with identity theft. The Federal Trade Commission (FTC) considers identity theft to be any instance where a criminal uses someone else’s personal information to “open accounts, file taxes or make purchases.” CPNs can pave the way for such fraudulent activity.
Here, we’ll explain what credit privacy numbers are, what they’re used for and how to avoid scams. Most importantly, you’ll also learn how to fix your credit without a CPN.
A credit privacy number, or CPN, is sold to consumers as a way to repair bad credit. But did you know these numbers can be associated with identity theft? Experian® reports that approximately one in every 20 Americans becomes a victim of identity theft each year, so it’s important to learn the dangers of CPNs if a company advertises one to you.
When you have bad credit, you may be more susceptible to methods that hurt your situation more than help it. Here, you’ll learn about what credit privacy numbers are, what they’re used for and how to avoid scams. Most importantly, you’ll also learn about how to repair your credit without a CPN.
Key takeaways:
Credit privacy numbers (CPNs) are often stolen Social Security numbers (SSNs).
Creating and even using a CPN can count as fraud.
No entities have the legal authority to issue CPNs despite their claims.
Table of contents:
What is a CPN?
A credit privacy number (CPN) is a nine-digit number set up in the same format as a Social Security number: XXX-XX-XXXX. CPNs aren’t issued by the federal government and have no official legal standing. They operate in a legal gray area, but using a CPN to apply for credit constitutes fraud, and they’re often tied to criminal activity.
You may also come across some other terms for CPNs, like:
Credit profile number
Secondary credit number
Credit protection number
What is a CPN used for?
Companies market and sell CPNs to supposedly fix bad credit, but using these products can have steep legal ramifications. CPNs are stolen Social Security numbers or products of synthetic identity fraud. It’s illegal to use a CPN to apply for credit, so even if you are “issued” one by a company, you can’t use it in any way that helps your credit.
A common scenario is criminals stealing Social Security numbers that belong to minors or those who are already deceased, since credit monitoring services usually don’t track their use. These stolen SSNs are then sold as CPNs, so all parties involved are participants in identity theft.
Synthetic identity fraud is another way criminals create CPNs to sell. This method involves using a computer algorithm to randomly create nine-digit numbers that match the formatting of Social Security numbers. Criminals then use an illegal online validator to ensure the fake number will pass as a legitimate SSN before selling it. One way they do this is by using potential SSNs that haven’t been issued to anyone yet.
How are CPNs different from SSNs, EINs and ITINs?
There are several types of numbers that can be used as identifiers for legal and financial purposes. Here’s a breakdown of the most common:
Social Security number (SSN): Issued by the federal government and is a unique identifier. Most U.S. citizens are issued one at birth, which they use to apply for a driver’s license, hold jobs, file taxes and apply for credit, among other things.
Employer identification number (EIN): A unique identifier for businesses and issued by the IRS. This allows business owners to open business bank accounts, get business licenses and file taxes under the business’s name.
Individual taxpayer identification number (ITIN): Similar to Social Security numbers, but the main difference is that ITINs are used by those classified as “authorized noncitizens.” For example, an immigrant working in the United States would need an ITIN to file and pay taxes.
The big difference between these numbers and a credit privacy number is that they’re legitimate numbers issued by actual entities within the federal government, and a CPN is not.
Is a CPN legal?
No, using a CPN is not legal. CPNs started as a byproduct of the Privacy Act of 1974. This act made it so that you couldn’t be forced to provide your Social Security number to a third party unless it was required by federal law, such as applying for a passport. This was meant to give Americans more privacy and protect them from identity theft.
Credit repair scams often market CPNs to those trying to rebuild their credit. But in fact, any business that sells a CPN is engaging in fraudulent activity.
What happens to those breaking the law with a CPN?
By purchasing a credit privacy number, you may unknowingly be breaking the law. According to the Federal Reserve Bank of St. Louis, CPN schemes often involve stolen CPNs from children, the elderly and incarcerated individuals. If an individual purchases a CPN, they may be convicted of various identity theft crimes, as well as the crime of making false statements on a loan or credit application.
The Department of Justice has been cracking down on identity theft, and they carry sentences of 15 to 30 years along with various fines for those who break these laws.
How to avoid a CPN scam
The best way to avoid a credit privacy number scam is to avoid anything involving a CPN. Be wary of a business that offers you a new credit identity—such as a CPN—it’s likely an identity fraud scam.
Other red flags include a company asking or suggesting that you lie about any identifying information, including your name, address or phone number, and a business asking for payment before completing any services.
Check out the Credit Repair Organizations Act to learn more about your credit repair rights.
How to report a CPN scam
The best way to eliminate criminals using fraudulent CPN scams is to report them whenever you see them, and you can do this through the Department of Justice. On their Fraud Section page, they have a variety of links and resources to report different scams.
Scams involving credit privacy numbers can also be reported to your local police department, your state’s attorney general and the Federal Trade Commission. While the investigation will be taking place at the state and federal level, reporting to your local police department can let them know what scams may be operating in the area so they can issue warnings to the community.
How to repair your credit without a CPN
Purchasing a CPN is tempting because it seems like a fast and easy way to repair your credit. In reality, building a good credit score takes time, but there are steps you can start taking today.
Dispute errors on your credit report: Derogatory marks include collections, late or missed payments, bankruptcies and other negative marks. These heavily weigh down your credit, so clean your credit report often.
Use a pay-for-delete letter: You may have heard that paying off collections usually won’t improve your credit. If you negotiate a pay-for-delete agreement with the collection agency, they may remove the collection account from your report, which would likely help your credit.
Become an authorized user: If you have bad credit, try to become an authorized user on a friend or family member’s credit card account to “piggyback” off their credit.
Find a cosigner: Making payments on loans—like auto or personal loans—can improve your credit. If you can’t get approved for a loan, finding a cosigner may help.
Don’t miss a payment: One of the best things you can do is ensure you don’t miss any payments that get reported to credit bureaus. Maintaining a good credit history will help you repair and improve your credit.
Repair your credit with Lexington Law Firm
Although there are credit repair scams, legitimate credit repair companies can help you rebuild your credit. Lexington Law Firm has a team of legal professionals who have experience with credit recovery.
They can review your credit report, find errors that may be hurting your credit and challenge them on your behalf. Our services also include tools such as a credit snapshot, which can help you maintain good credit and improve your financial future.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
Reviewed By
Vince R. Mayr
Supervising Attorney of Bankruptcies
Vince has considerable expertise in the field of bankruptcy law.
He has represented clients in more than 3,000 bankruptcy matters under chapters 7, 11, 12, and 13 of the U.S. Bankruptcy Code. Vince earned his Bachelor of Science Degree in Government from the University of Maryland. His Masters of Public Administration degree was earned from Golden Gate University School of Public Administration. His Juris Doctor was earned at Golden Gate University School of Law, San Francisco, California. Vince is licensed to practice law in Arizona, Nevada, and Colorado. He is located in the Phoenix office.
The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
The United States Department of Veterans Affairs doesn’t have a minimum credit requirement for loans. However, private lenders are usually more favorable to applicants with a credit score of at least 500.
The United States Department of Veterans Affairs (or VA for short) doesn’t have set credit requirements for loans. Yet, “What is the minimum credit score for a VA loan?” remains a common question. This is because there are private lenders who also offer VA loans—and who typically have specific credit requirements for borrowers.
Most private lenders are willing to work with applicants who have at least a 500 credit score. The higher your score, the more likely you are to obtain a loan. Here, we’ll discuss the nuances of credit scores and the military‘s requirements for VA loans. We’ll also share how Lexington Law Firm can assist you on your credit-building journey.
Key takeaways:
The VA has a special debt relief program for veterans.
Veterans can qualify for unique loans.
The Servicemembers Civil Relief Act only applies to active-duty members.
The minimum credit score for a VA loan
The VA doesn’t require a minimum credit score for loans. Private lenders, however, will use your credit score to gauge your eligibility and set your interest rate. Applicants with higher credit scores tend to receive better rates, and private lenders tend to look favorably on applicants with good credit scores (670 – 739, according to the FICO® model).
That said, it’s still possible to get a loan with bad credit. Applicants with low credit scores can make a higher down payment if they have the capital to do so. Applying with a cosigner is also another valid alternative; lenders will look at the creditworthiness of both signees when deciding whether or not to approve you.
What are the VA loan eligibility requirements?
VA loans have unique qualifiers besides credit scores that applicants will need to keep in mind. Since the Department of Veterans Affairs primarily works with service members who’ve already retired, many active-duty service members may not be eligible for VA loans.
Below, we’ll break down the eligibility criteria for VA loans by category.
Credit and income Information
We know the VA doesn’t have strict limits on credit, but they do require proof of income. Applicants will also have much better odds if their debt-to-income ratio is below the 44 percent threshold.
Discharge status
So long as an applicant wasn’t dishonorably discharged from service, they are eligible for a loan. Unless a service member was deemed insane when they were charged, title 38 of the United States Code (38 U.S.C. § 5303) states that individuals are susceptible to a statutory bar to benefits if they were released or discharged for any of the following reasons:
Was sentenced to a general court-martial
Was a conscientious objector and refused to comply with lawful orders of competent military command
Deserted their post
Resignation by an officer for the good of the service
Being absent without official leave (AWOL) for a consistent period of 180 days or more
Requested release from service as an alien during a period of hostilities
Certificate of eligibility
You’ll need a certificate of eligibility (COE) to apply for a VA home loan. Once you gain a copy of your discharge/separation papers, you can request your COE by mail, phone, through a lender or via the VA’s online portal.
Military service status
The requirements for this category will vary depending on your relationship with the military.
Active-duty service members: Must have 90 consecutive days of service.
Veterans: Must have 90 days of service during wartime or 181 days of service during peacetime.
National Guard or Reservists: Are required to have 90 days of active duty service or six completed years of service.
Spouses: Spouses of deceased or disabled service members.
Occupancy requirements
The VA has specific occupancy requirements to deter people from misusing their loans. VA loans are intended for primary residences, not investment properties or vacation homes. To that end, applicants can only secure VA for their primary residence and will need to submit proof of homeownership in most instances.
Applicants will also have 60 days after closing on a property to move in and occupy it as their primary residence. In certain circumstances (such as if an applicant is on active duty), this 60-day window will be extended.
What are the benefits of using a VA loan?
VA loans provide a host of advantages to anyone who can secure them. Several examples include:
No down payment: If you can secure a VA loan for your home, you won’t be required to offer a down payment. Applicants who want to lower their interest rate will still have the option to place a down payment.
Low-interest rates: Because VA loans are backed by the government, they traditionally come with some of the lowest interest rates available.
PMI isn’t required: Once again, thanks to government backing, VA loans let applicants save money by forgoing private mortgage insurance (PMI).
3 simple ways to improve your credit
We’ve established that private lenders prefer applicants with good credit. FICO, one of the most respected credit reporting companies in the world, defines good credit scores as any that fall between 670 and 739.
If your score isn’t already in that range, here are a few strategies to help you along the way.
Regularly make your payments on time
FICO considers payment history to be the most important factor when determining what affects your credit score. VantageScore®, a credit reporting company founded by Equifax®, Experian® and TransUnion®, also holds payment history in high regard.
Missing a payment can drastically hurt your credit. On the other hand, consistently making payments on time, even if it’s just the minimum payment, will steadily yield positive results.
Maintain a low credit utilization rate
Credit utilization looks at your credit borrowing trends—your current balances compared with your total credit limit determines your credit utilization rate for a given period. FICO and VantageScore urge borrowers to keep their utilization rates below 10 percent, though 30 percent and below is the next best option.
Dispute errors on your credit report
Errors can appear on your credit report that can dramatically lower your credit. It’s possible to challenge these errors and potentially have them removed, though many people may need help handling credit disputes.
Lexington Law Firm works to help people address these errors on their reports. Plus, we can also contact the major credit reporting bureaus on your behalf.
Monitor your credit with Lexington Law Firm
Low credit scores may make it harder to secure a VA loan. However, it’s never too late to improve your credit and bolster your eligibility. Lexington Law Firm offers unique credit repair services for veterans and service members whose credit may have altered during their time in the military.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
Reviewed By
Alexis Peacock
Supervising Attorney
Alexis Peacock was born in Santa Cruz, California and raised in Scottsdale, Arizona.
In 2013, she earned her Bachelor of Science in Criminal Justice and Criminology, graduating cum laude from Arizona State University. Ms. Peacock received her Juris Doctor from Arizona Summit Law School and graduated in 2016. Prior to joining Lexington Law Firm, Ms. Peacock worked in Criminal Defense as both a paralegal and practicing attorney. Ms. Peacock represented clients in criminal matters varying from minor traffic infractions to serious felony cases. Alexis is licensed to practice law in Arizona. She is located in the Phoenix office.
The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
You incur a balance transfer fee when you move an outstanding debt from one card to another. There’s usually a 3 to 5 percent charge for this procedure.
A balance transfer fee is a charge that occurs when you transfer an outstanding balance from one account to another. Balance transfer fees are based on the amount of money you’re attempting to migrate. Normally, fees are around 3 to 5 percent of your outstanding balance.
Boosting your comprehension of credit card terms and conditions, balance transfers and interest rates can help you avoid overpaying with balance transfer fees. This guide will explore these fees in detail and offer strategies to make the most of your credit cards without breaking the bank.
Key takeaways:
Balance transfer fees only apply if you have an outstanding card balance.
There’s usually a $5 or $10 minimum fee for balance transfers.
Fees can apply even if you transfer your balance to a card with zero percent interest.
Table of contents:
What is a balance transfer fee?
To help you better understand what a balance transfer fee is, we’ll break this term down:
Your balance refers to the amount of money that you’re currently borrowing from a lender.
A transfer results from asking a lender to move your balance from one account to another.
The fee kicks in as a charge for initiating that transfer—the cost of which is based on a percentage of the balance you’re transferring.
Balance transfer fees range from 3 to five percent of the amount you wish to transfer. The exact price will vary from one instance to the next, but you can find more specific information in your lender’s terms and conditions for balance transfers.
How do you avoid balance transfer fees?
Finding and using a card that doesn’t charge a fee is the most straightforward way to avoid balance transfer fees altogether. These cards may also have a 0 percent APR offer for a set amount of time, which can save you lots of money in the long run.
Another alternative to initiating a balance transfer is utilizing a debt consolidation loan. Rather than keep track of multiple accounts with varying interest rates, this option can help you consolidate credit card debt in one place. However, keep in mind that consolidation loans can have high requirements for applicants, and your accounts might be frozen while the process takes place.
Does a balance transfer hurt your credit score?
Initiating a balance transfer won’t affect your credit alone, though the result may cause your scores to fluctuate. One factor it may affect is your credit utilization, which compares your current balance against your total credit limit and makes up 30 percent of your FICO® credit score. Transferring funds to even out the balances on your credit cards can improve your credit utilization and positively affect your credit health. It’s best to aim for a credit utilization rate of less than 30 percent, if you can.
Conversely, applying for a new credit card typically triggers a hard inquiry on your credit profile, which can temporarily hurt your credit. Inquiries can stay on your credit report for up to two years, but they shouldn’t hurt your credit very much or for very long.
Lastly, the fee generated from initiating a balance transfer can take away from funds that you would’ve used to pay down a balance. Missing or being late on a payment can negatively impact your credit, as payment history makes up 35 percent of your FICO score.
Is a balance transfer fee worth paying?
Balance transfer fees are often worth it if you’re transferring money onto a card with low or no interest at all. Let’s say you currently have a card with a 30 percent APR and a balance of $1,000. If you have a 30-day billing cycle, that balance would generate $24.95 each cycle.
If you transferred that balance to a card with 0 percent APR, that balance would generate $0 each cycle for a one-time balance transfer fee of $30 to $50. In essence, balance transfer fees might be worth it if you have a balance that you’ll need to pay off over a long period.
How to find the right balance transfer credit card
The best balance transfer cards offer much more than a promotional 0 percent APR incentive. How these cards function long-term can also help you determine if they’re right for you. Below, we outline several important factors to keep in mind when shopping around for a balance transfer card.
Double-check your terms and conditions
The terms and conditions of a new credit card will outline a wealth of helpful information for you to keep in mind. You can typically find these documents digitally, or have them mailed to you. Here, you can see your card’s specific parameters for balance transfers along with your credit limit and APR.
Check if there are minimum balance transfer fees
As previously mentioned, balance transfers normally float between 3 and 5 percent of the transfer amount. However, minimum fees can kick in if you transfer a small amount of money. Normally, these minimum fees range from $10 to $15.
Look out for annual fees
Annual fees can vary for different types of credit cards. Some don’t charge anything, while others can cost hundreds of dollars. When transferring funds onto a new card, be sure that you can manage the annual fee that might come with it.
Increase your financial knowledge with Lexington Law Firm
Balance transfer fees are often inconvenient and occasionally confusing. Speaking with a financial expert can take much of the guesswork out of handling account balances, so you may want to look into this.
Additionally, Lexington Law’s services can help you review your credit report and keep an eye out for any inaccurate negative items that may be affecting your credit. You can also refer to our library of articles about credit and other financial topics for more information.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
Reviewed By
Moriah Beaver
Associate Attorney
Moriah is an attorney practicing in consumer advocacy at Lexington Law.
Before joining Lexington, she represented plaintiffs in personal injury litigation, dealing with claims arising from car accidents, slip and falls, and dog bites. Moriah studied English at Brigham Young University for her undergraduate degree and went on to graduate from Brigham Young University’s J. Reuben Clark Law School. She is from Hau’ula, Hawaii, but has been a resident of Utah for over 10 years now.
The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
Credit card companies report payments at the end of their monthly billing cycle, also known as the statement closing date.
Credit cards are great for making large purchases and racking up points or miles and useful for building and improving your credit. If you’re a credit card holder constantly tracking your credit score to see improvement, it can be helpful to know when companies report to credit bureaus.
Unfortunately, issuers don’t report to credit reporting agencies on a specific day of the month. However, we can investigate a few factors to provide a prediction of when they will report as well as when you will see your payments reflected on your credit report.
Table of contents:
When do credit card companies report to credit bureaus?
How does credit card utilization affect your credit score?
How to decrease your credit utilization risk
How often do credit reports and scores update?
When do credit card companies report to credit bureaus?
Unfortunately, there isn’t a set date for when credit card companies report to the three credit bureaus: TransUnion®, Experian® and Equifax®. However, you can estimate the time frame by considering a few factors. Credit card companies typically report payments at the end of the monthly billing cycle. This is also known as your statement closing date. You can find these dates on your monthly statement.
However, don’t expect your credit report to update on the same day. It usually takes a bit for credit reporting agencies to update the information on your credit report. Updates on your credit report will also depend on:
The number of lines of credit
Due dates for every line of credit
If the credit issuer reports to all three credit bureaus or just one or two
The frequency and speed with which the credit bureau updates reports
If you’ve just paid your statement balance or previously unpaid balances, you likely want to see that reflected on your credit report as soon as possible. Since we don’t have a set-in-stone date for when you’ll see updates on your credit report, we recommend waiting at least a month or so to see any changes. If several months pass and you don’t see any updates to your report, we recommend contacting your credit card company to confirm your payments were correctly processed.
How does credit card utilization affect your credit score?
Credit utilization is the ratio of your current outstanding credit debt to how much total available credit you have. Available credit is the maximum amount of money you can charge to your credit card. A low credit utilization is a good sign that you, the borrower, are using a small amount of your credit limit.
A large outstanding credit balance—or higher credit utilization—can negatively affect your credit. This is especially true if the credit utilization percentage is higher than 30 percent. The lower your credit utilization, the better your credit may be.
How to decrease your credit utilization
Your credit score is affected by five factors: credit utilization, credit mix, new credit, payment history and length of credit history. However, credit utilization makes up 30 percent of your score. If you’re worried about how your credit utilization impacts your credit score, there are ways to decrease your risk and potentially improve your credit.
1. Complete multiple payments
Completing smaller payments every month can help lower your credit balance. You can also set up automatic payments so your credit balance is as low as possible when your credit card company reports to the credit bureaus.
2. Ask for a higher credit limit
Increasing your credit limit can lower your credit utilization ratio, as you’ll have more credit available. This can improve your credit score as it reduces the percentage of credit used every month. However, a higher credit limit may encourage you to spend more, which could go against your goal to improve your credit. Only ask for a higher credit limit if you think you’ll stay within your current average spending amount.
3. Complete payments on time
Paying your bills by their due date is the easiest way to improve your credit. This can become harder if you have multiple credit accounts, as they won’t always have the same due dates. Keeping track of your due dates (found on the monthly statements) via credit card management apps or similar tools can help you stay on top of your bills.
If you can do so, making multiple payments on your card(s) throughout the month is the smartest move. This is because it can increase the likelihood that your credit utilization ratio is low when your credit card provider reports your data to the credit bureaus.
How often do credit reports and scores update?
While there isn’t an exact date when your credit score and report will update, it usually occurs within a 30- to 45-day timeframe. This also depends on when the credit bureaus refresh the information in your report. Remember that if you have multiple lines of credit, you’ll see your credit score constantly fluctuating based on when your creditors report to the credit reporting agencies.
How long until a new card appears on your credit report?
Just received and activated a new credit card? You’ll need to wait a bit to see your new credit card appear on your credit report. You can expect it to show up 30 to 60 days after your application was approved and your creditor opened the account. The number of days will depend on your credit card’s billing cycle.
Assess your credit with Lexington Law
Now that you have a better understanding of when companies report to credit bureaus, it’s also a good time to assess your credit score. If you receive your credit report and notice your credit score isn’t as good as it should be, don’t worry. With help from professional credit repair consultants at Lexington Law Firm, you may be able to improve your credit through our credit repair process. Get started with a free credit assessment today.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
Reviewed By
Nature Lewis
Associate Attorney
Before joining Lexington Law as an Associate Attorney, Nature Lewis managed a successful practice representing tenants in Maricopa County.
Through her representation of tenants, Nature gained experience in Federal law, Family law, Probate, Consumer protection and Civil law. She received numerous accolades for her dedication to Tenant Protection in Arizona, including, John P. Frank Advocate for Justice Award in 2016, Top 50 Pro Bono Attorney of 2015, New Tenant Attorney of the Year in 2015 and Maricopa County Attorney of the Month in March 2015. Nature continued her dedication to pro bono work while volunteering at Community Legal Services’ Volunteer Lawyer’s Program and assisting victims of Domestic Violence at the local shelter. Nature is passionate about providing free knowledge to the underserved community and continues to hold free seminars about tenant rights and plans to incorporate consumer rights in her free seminars. Nature is a wife and mother of 5 children. She and her husband have been married for 24 years and enjoy traveling internationally, watching movies and promoting their indie published comic books!
The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
Personal loan interest rates can range from 6 to 36 percent and are based on various factors. Your interest rate may depend on your credit score, the lender type and other factors based on your financial situation.
Recent data shows Americans have over $241 billion in personal loan debt. Whether you have personal loan debt or are considering taking out a personal loan, this may not always be bad debt. When used responsibly, personal loans can help you get better interest rates by consolidating other debts or help when you need additional funds. When taking out a loan, it’s helpful to know the average personal loan interest rates so you can get the best deal possible.
The interest rate is a fee based on the percentage of the loan amount, so ideally, you want the lowest interest rate possible. We’re going to discuss the average interest rates based on various factors, like your credit score and lender types, to help you find a loan that has the best rates.
Average personal loan interest rates by credit score
One of the best ways to get the lowest interest rates for personal loans is by having a high credit score. There are ways to get a loan with bad credit, but these loans often have some of the highest interest rates. High interest rates mean you may pay hundreds or thousands more in interest fees when you take out a loan. Below is a chart showing the difference between interest rates when taking out a loan based on your credit score:
Credit score
Average loan interest rate
300 – 629
28.50% – 32.00%
630 – 689
17.80% – 19.90%
690 – 719
13.50% – 15.50%
720 – 850
10.73% – 12.50%
Source: Bankrate
Average personal loan interest rates by lender type
You have a variety of options when taking out a personal loan. You can go into traditional brick-and-mortar financial institutions like banks or credit unions and find personal loans online. Some of these lenders may even offer bad credit loans, but remember, these typically come with higher interest rates.
In the following sections, we show interest rates from some of the most popular lenders from each category. As you’ll see, each lender has a range of interest rates, which depends on your credit score, income and other financial information.
Average personal loan rates by bank
Personal loan interest rates from banks can range from 6.99 percent to 24.99 percent. Currently, Santander Bank offers the lowest interest rate range.
Average personal loan rates by credit union
Credit unions are another way to get personal loans, and they’re similar to banks except they’re member cooperatives and not-for-profit. Each of the credit unions listed below has lower interest rates on the higher end of the range, with none being over 20 percent.
Average personal loan rates by online lender
Many people turn to online lenders because not only are they convenient, but they’re also more likely to lend to those with bad credit or those who need a personal loan after a bankruptcy. Depending on your credit score and credit history, some of these personal loans have the highest interest rates.
5 factors that affect your personal loan interest rate
If you’re in the market for a personal loan, it’s helpful to know what lenders are looking for. This helps you get approved for the loan and the best interest rate possible. If you have poor credit, using a cosigner may help with approval, but if you want to get a personal loan without a cosigner, here’s what lenders are looking at:
Credit score and report: Your credit score and report show your credit history and how likely you are to pay back your loan. A low credit score can lead to higher interest rates.
Income: Lenders use your income to determine the loan amount and whether you can pay the amount back.
Debt-to-income ratio: Your debt-to-income ratio is a calculation of how much debt you currently have compared to your income. Ideally, it should be low.
Employment status: Employment shows a steady flow of income. If you’re self-employed or an independent contractor, it may make getting a loandifficult.
Length of loan: Shorter loan terms often come with higher interest rates.
What is a good personal loan interest rate?
What’s considered a “good” personal loan interest rate will depend on the person and their situation. Typically, a good interest rate is anything below the average rate for your credit score. Ideally, you want to improve your credit to get even better interest rates on personal loans.
How your credit score affects your personal loan interest rate
Your credit score and credit history play a big part in getting a good personal loan interest rate. As mentioned earlier, a high interest rate can cost you thousands in additional interest fees. If you have a bad credit score, you may have errors on your credit report that are hurting your credit. Lexington Law Firm offers an in-depth credit assessment that shows you where your credit stands before you apply for a loan. Get your free credit assessment today.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
Reviewed By
Nature Lewis
Associate Attorney
Before joining Lexington Law as an Associate Attorney, Nature Lewis managed a successful practice representing tenants in Maricopa County.
Through her representation of tenants, Nature gained experience in Federal law, Family law, Probate, Consumer protection and Civil law. She received numerous accolades for her dedication to Tenant Protection in Arizona, including, John P. Frank Advocate for Justice Award in 2016, Top 50 Pro Bono Attorney of 2015, New Tenant Attorney of the Year in 2015 and Maricopa County Attorney of the Month in March 2015. Nature continued her dedication to pro bono work while volunteering at Community Legal Services’ Volunteer Lawyer’s Program and assisting victims of Domestic Violence at the local shelter. Nature is passionate about providing free knowledge to the underserved community and continues to hold free seminars about tenant rights and plans to incorporate consumer rights in her free seminars. Nature is a wife and mother of 5 children. She and her husband have been married for 24 years and enjoy traveling internationally, watching movies and promoting their indie published comic books!
The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
There are several possible reasons why your credit score won’t go up, such as the lender hasn’t reported to the credit bureaus yet, you have fallen behind on payments, you have high credit utilization or you have a short credit history.
A good credit score can help you get approved for loans, secure low interest rates, and receive the best terms. However, improving your credit can be tricky, especially if you feel stuck at a certain number.
If you frequently check your credit score and don’t see the number change, you may wonder, “Why won’t my credit score go up?” In this post, we’re going to dive into 10 potential reasons why your credit score is stagnant and what to do about it. Read on to learn more.
Table of contents:
1. Your credit score hasn’t been updated yet
Lenders typically report to the three credit bureaus every 30 to 45 days. Therefore, it can take up to a month for your credit score to reflect new changes. If you recently paid off an account and haven’t seen a change in your score yet, there’s no need to worry.
What to do about it: If you don’t see the update reflected in your credit report after a month or two, consider contacting your lender.
2. You’ve fallen behind on payments
Payment history is a fundamental factor that affects your credit—accounting for 35 percent of your FICO® score. If a payment is over 30 days past due, your lender will report it to the credit bureaus. Even one late payment can hurt your credit significantly. Late payments also stay on your credit report for up to seven years, although their influence on your credit report declines over time.
What to do about it: Get in the habit of making consistent on-time payments.
3. You have high credit utilization
Your credit utilization, or the amount of money you owe compared to your credit limit, is another factor that influences your credit. For example, if your credit limit is $12,000 and you owe $3,000, your credit utilization rate is 40 percent.
While using your available credit isn’t necessarily bad, a high credit utilization rate can signal to lenders that you’re reliant on credit and, therefore, are a high-risk borrower.
What to do about it: Aim to keep your credit utilization under 30 percent by reducing your spending or increasing your credit limit.
4. You have a short credit history
Your length of credit history, or the amount of time your accounts have been established, accounts for 15 percent of your FICO score. A long credit history is helpful to your credit because it provides lenders with enough data to accurately determine your credit risk. Remember that while a long credit history is beneficial, FICO assures that it’s “not required for a good credit score.”
What to do about it: Be patient and keep old credit accounts open.
5. You have negative items on your credit report
Delinquent accounts, bankruptcies, charge-offs, and collection accounts are all major negative items. If you have any of these on your credit report, they may be preventing you from improving your credit.
Although negative information will eventually fall off your credit report, the amount of time that takes depends on the type of negative item. Most negative information stays on your credit report for about seven years.
What to do about it: While not guaranteed, you can try sending a pay for delete letter or request a goodwill deletion from your creditor to get the negative items removed.
6. Your credit mix isn’t diverse
Credit mix refers to the variety of credit accounts you hold. Examples of credit accounts include credit cards, mortgages, auto loans, credit cards, installment loans, and so on. Credit mix determines 10 percent of your credit score.
What to do about it: While you don’t necessarily need one of each type of credit, consider opening new accounts to diversify your credit mix.
7. You have multiple new hard inquiries
When you submit a new credit application, the creditor will perform a hard inquiry on your credit file, which can temporarily lower your score. While the impact of a hard inquiry is only around 5 points, multiple credit inquiries can add up and cause a significant drop in your credit.
If you frequently apply for new credit, the compounding hard inquiries may be preventing you from improving your score.
What to do about it: Wait at least six months between each new credit application to limit the effect of hard inquiries on your credit.
8. Your credit score is already high
Those with very good or excellent credit scores may struggle to advance their credit standing. The better your credit score, the harder it becomes to raise it because there is less room for improvement. Once your score is in the 700s or 800s, increasing it can be challenging.
What to do about it: Keep up with your good credit habits, but be aware that progress may slow as your score increases.
9. You have errors on your credit report
Errors on your credit report can damage your credit. Review your credit report at least once a year to check for inaccurate information. According to the Consumer Financial Protection Bureau, common errors include:
Identification errors
Misreported account status
Data management errors
Inaccurate balances
What to do about it: If you find an error on your credit report, file a dispute with the credit bureaus to get it corrected.
10. You’ve been a victim of identity theft or fraud
Identity theft can wreak havoc on your credit score. Scammers can open new accounts in your name, purchase items with your credit card and more. That’s why it’s important to keep an eye out for the following warning signs of identity theft:
Charges for purchases you didn’t make
Calls from debt collectors regarding accounts you didn’t open
Accounts on your credit report that you didn’t open
Loan applications getting rejected
Mail stops being delivered to, or is missing from, your mailbox
What to do about it: If you suspect you’ve been a victim of identity theft, make sure to set up fraud alerts and freeze your credit. Ready to move the needle on your credit score? At Lexington Law Firm, we’ll determine what inaccurate negative items might be hurting your credit and address them with the credit bureaus. Among our services, we offer an Identity Theft Focus Track, created specifically for individuals financially recovering from identity theft. Get started today.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
Reviewed By
Paola Bergauer
Associate Attorney
Paola Bergauer was born in San Jose, California then moved with her family to Hawaii and later Arizona.
In 2012 she earned a Bachelor’s degree in both Psychology and Political Science. In 2014 she graduated from Arizona Summit Law School earning her Juris Doctor. During law school, she had the opportunity to participate in externships where she was able to assist in the representation of clients who were pleading asylum in front of Immigration Court. Paola was also a senior staff editor in her law school’s Law Review. Prior to joining Lexington Law, Paola has worked in Immigration, Criminal Defense, and Personal Injury. Paola is licensed to practice in Arizona and is an Associate Attorney in the Phoenix office.
The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
After you’ve been notified of a data breach, you should contact your bank and the three major credit bureaus as soon as possible.
When a data breach occurs, you should monitor all of your accounts for suspicious activity. Creating alerts for your banking accounts can help you react to suspicious transactions. A similar strategy is advised for your credit report; in certain cases, companies will have to provide credit monitoring services to their customers for up to 12 months.
Data breaches can lead to negative situations, such as identity theft and credit card fraud. Below, we’ll discuss what to do after a data breach occurs and explore options for reliable credit monitoring services.
Key takeaways:
A data breach occurs when cybercriminals illegally gain access to sensitive information.
In certain cases, companies will be ordered to provide credit monitoring services to their customers for up to 12 months.
The Equifax® data breach of 2017 compromised 148 million Americans and 15 million British citizens.
Table of contents:
What is a data breach?
A data breach occurs when cybercriminals and bad actors illegally access sensitive data. A data breach can happen to specific individuals and large organizations—such as the 2017 Equifax data breach, which impacted nearly 150 million Americans and 15 million British citizens.
If an organization is held accountable for a data breach by a court of law, compensation may be issued to victims. For example, the Equifax breach settlement was finalized in January 2022 and resulted in free credit monitoring services and up to $425 million of support to impacted individuals.
How do you check if your personal information was exposed?
The Data Breach Notification Act offers guidelines and regulations in the event of a data breach. Section 2 of this act states that businesses and federal agencies must tell affected individuals that their data has been leaked “without unreasonable delay.”
These specific guidelines are relevant after a data breach occurs. Here are several actionable steps if you want to take proactive measures to combat a data breach:
Intrusion detection system (IDS): This technology can monitor a network and determine if suspicious or malicious activity is underway.
Data leak checker websites: Websites like Have I Been Pwnd will help you check if one of your emails was part of a data breach.
Review your emails: If your spam and junk email boxes have an unusual amount of spam, your email could’ve been compromised.
What should you do after a data breach?
After you’ve received a notice that your data was compromised, it’s natural to feel overwhelmed or upset by this violation of your privacy. Nevertheless, taking action and making adjustments is the best way to minimize or prevent the worst outcomes.
Change your passwords
If you were part of a data breach, there’s a high likelihood that cybercriminals might possess your current login information. Changing your passwords can prevent bad actors from signing into your accounts.
Ideally, it’s best to use a complex password comprising upper and lowercase letters, special characters and numbers. The less this new password resembles your old one, the better. Furthermore, changing your password every few months is an excellent preventive measure.
Activate two-factor authentication (2FA)
Two-factor authentication (2FA) is an additional login step where users have to finish signing in on a trusted device, usually a smartphone. 2FA reduces the likelihood of a bad actor illegally accessing one of your accounts as the additional login measure (your phone) is on your person.
Look into credit monitoring services
For those wondering what credit monitoring is, the term refers to any service that watches your credit reports and alerts you about suspicious activity that doesn’t match your usual financial habits.
Credit monitoring services look for everything from fluctuations in your credit score to new accounts that have been opened in your name. Lex OnTrack is a monitoring service that tracks your credit history and helps protect your identity from fraud.
Freeze your credit with the three credit bureaus
Learning how to freeze your credit can help you stop cybercriminals from taking unauthorized actions with your credit. To fully freeze your credit, you’ll at least want to contact Equifax®, Experian® and TransUnion®—the three major credit bureaus.
Contact your bank
Speaking with your bank after you’ve been notified of a data breach is an effective way to protect your finances. You’ll have an opportunity to notify your financial institution of this unfortunate event, and you’ll also be able to review recent account activity.
If recent purchases were made on your account that don’t align with your habits, they could be tied to unlawful activity.
What states have data breach laws?
Every state in America has cybersecurity laws that protect civilians, organizations and federal agencies in the event of a data breach.The Data Breach Notification Act generally applies to all 50 states alongside territories and districts.
At the time of writing, California, Colorado, Connecticut, Utah and Virginia have unique data privacy laws that differ somewhat from their contemporaries. For instance, the California Consumer Privacy Act (CCPA) gives Californians the right to demand all information that a company and its third-party partners have on them.
3 reasons data breaches happen
Data breaches are incredibly alarming, and it’s tempting to search for an easy explanation as to why they happen. Though only a small number of them are successful, cyberattacks are quite common.
A study by the Clack School found that some computers may be attacked, on average, approximately 2,200 times each day. Some factors that raise the odds of a cyberattack succeeding are outlined below.
1. Malware attacks
Malware (or malicious software) can compromise security if someone downloads it onto their device. For example, a key logger is a type of malware that records every keystroke a user inputs. Such software could help cybercriminals steal admin credentials from an organization, then log in and access sensitive data.
2. Internal data leak
“What is a data leak?” is a fair question, as this term sounds similar to a data breach. However, a data leak occurs when an internal source releases private information to the general public. If someone working at an organization gives out confidential login details, a cybercriminal could capitalize on that and initiate a data breach.
3. Outdated software
Software updates bolster a network’s security and make it harder for hackers to slip past defenses. Repeated cyberattacks that are launched against systems with outdated software are more likely to be successful.
Monitor your credit with Lexington Law Firm
The sheer number of cyberattacks that occur each day can be alarming, but there are many ways to protect yourself from digital disturbances. A credit monitoring service is an excellent tool that works in the background and catches seemingly minute details.
Explore Lexington Law’s services, which include credit monitoring as well as assistance with challenging errors on credit reports, if any are found.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
Reviewed By
Moriah Beaver
Associate Attorney
Moriah is an attorney practicing in consumer advocacy at Lexington Law.
Before joining Lexington, she represented plaintiffs in personal injury litigation, dealing with claims arising from car accidents, slip and falls, and dog bites. Moriah studied English at Brigham Young University for her undergraduate degree and went on to graduate from Brigham Young University’s J. Reuben Clark Law School. She is from Hau’ula, Hawaii, but has been a resident of Utah for over 10 years now.
A judgment is an order issued by a judge or jury to settle a lawsuit. This decision details the rights, responsibilities, and obligations of each party. For example, if you fail to pay a debt, the lender can take you to court. In this case, the judge may order you to pay the other party as part of the court’s final judgment.
The order can be issued in one of two forms:
A monetary judgment: A judgment that orders one party to pay the other party a specific amount of money.
A nonmonetary judgment: A judgment that involves a nonmonetary type of resolution, such as the exchange of property or services. For example, a contractor may be ordered to complete a service for a client.
There are several classifications for judgments, including:
In personam: This is the most common civil judgment classification. It occurs when one party is liable to another.
In rem: Rather than involving personal liability, in rem judgments hold liability over a specific item, such as property.
Quasi in rem: Quasi in rem judgments consider the legal rights of individuals and not necessarily all parties involved.
Ultimately, if you don’t pay a debt, the lender or bill collector can file a lawsuit against you to recoup the money. The judge or jury determines if and how much money you owe. These terms are laid out in the final judgment.
What Is a Judgment on Property?
Your property includes both physical items and money. That means judgment creditors can seek debt payment from more than your wages and bank accounts. They may also take back a car you financed or other personal property. Another option is placing a lien on some of your property, such as your home.
What Property Can Be Taken to Settle a Judgment?
Creditors must follow the law when applying a judgment to take, or seize, your property. Some things are exempt—which means they can’t touch those items or properties. Some examples include the home you live in, the furnishings inside it, and your clothes. State laws identify these items and set limits based on their value.
Non-exempt property can be taken to help meet a judgment debt. Your creditor can take or leverage these possessions in the following ways:
Wage attachments. This is known as wage garnishment. When your employer receives the proper legal notice, they must withhold a percentage of your wages. These payments are sent to the judgment creditor until your debt is paid. The Consumer Credit Protection Act caps these types of garnishments. The limit is 25% of your disposable weekly wages or the amount you earn that’s above 30 times the minimum wage. The lessor of these two amounts applies. Some states set the cap even lower.
Nonwage garnishment. If you’re retired, unemployed, or self-employed, your bank account may be garnished instead. Here, too, there are exemptions. Veterans payments, social security, and disability benefits are not eligible for nonwage garnishment. Some states add even more restrictions to the garnishment of bank funds.
Property liens. If you own real estate, your judgment creditor may file a legal claim against it. These liens notify lenders of the creditor’s rights to your property. That way, if you sell your real property, the debt must be paid out of the proceeds. In many states, liens are placed automatically when a judgment is entered.
Property levies. Judgments may also allow some of your non-exempt personal property to be taken through a levy. Law enforcement may seize things like valuable collections or jewelry to be sold at auction. Sales proceeds are applied to your debt.
What Are the Types of Judgments?
Judgments come in many forms. Below is a look at the five types of judgments.
Satisfied judgment: A satisfied judgment means the debt is settled. This doesn’t necessarily mean you have paid the debt in full. It could mean there’s a new payment arrangement and you’re making regular payments.
Unsatisfied Judgment: An unsatisfied judgment means the debt is not settled yet. You’re expected to follow the court order and make payments on the outstanding debt. Until you make your final payment or come to another agreement with the other party, it will remain an unsatisfied judgment.
Vacated Judgment: If you don’t agree with the court’s initial judgment, you have the right to appeal that decision. If the judge decides to dismiss the case, the initial order becomes a vacated judgment.
Summary Judgment: If both parties agree to the basic facts of the case, either party may request to skip the trial and go straight to a summary judgment. The judge issues this final judgment without going through the process of holding a trial.
Renewed Judgment: Some states allow creditors to seek a new judgment for specific reasons. If this happens, the judge may issue a renewed judgment. This judgment may void the initial judgment or serve as an additional order.
Three Ways of Getting a Judgment
There are several ways a civil judgment can be determined.
1. Judgment After Trial
As the name suggests, a judgment after trial is a decision that occurs only after a trial. Once the judge or jury hears all the evidence and makes a final decision, the judge issues a formal judgment in the case.
2. Consent Judgment
A consent judgment occurs when both parties negotiate a final settlement. The judge must approve this final agreement, which is done by issuing a formal consent judgment.
3. Default Judgment
A default judgment occurs when the defendant fails to respond to a summons and complaint. In this case, the judge issues a default judgment in favor of the plaintiff without hearing any evidence from the defendant.
Can Judgments Affect Your Credit?
Judgments can’t directly impact your credit because the details of these orders aren’t part of your credit report. However, it’s likely that issues leading up to the final judgment could affect your credit. For example, your payment history can remain on your credit report for up to seven years. If you have any missing or late payments that led to the judgment, this history can impact your credit score.
A judgment could also have a positive effect on your credit. For example, once the debt is paid, the account balance should change to zero on your credit report. This could help lower the amount of debt you owe, which could impact your credit utilization rate.
Once the judge issues a judgment, you can use Credit.com’s Free Credit Score service to see if it had any effect on your score. As you work to rebuild your credit, you can enroll in Credit.com’s ExtraCredit® program to monitor your credit score over time.
What Is a Judgment on a Credit Report?
Judgments aren’t reported on your credit report and don’t directly impact your credit score. However, judgments are public records, so lenders could still have access to this information. This could affect your ability to secure credit in the future.
What Happens After a Judgment Is Entered Against You?
Once the judge enters a judgment, both parties must abide by the order. For example, you must pay the amount of money ordered by the judge, and the creditor must mark the account paid in full once payment is made. If you can’t pay the amount all at once, you may be able to set up a payment arrangement. You’re legally obligated to make these payments.
What Happens After a Judgment Is Entered Against You?
The court enters a judgment against you if your creditor wins their claim or you fail to show up to court. You should receive a notice of the judgment entry in the mail. The judgment creditor can then use that court judgment to try to collect money from you. Common methods include wage garnishment, property attachments, and property liens.
State laws determine how much money and what types of property a judgment creditor can collect from you. These laws vary. So, you need to look to your own state for the rules that apply. A consumer law attorney can help you understand your state’s laws on judgment collections.
What Is the Difference Between a Civil Judgment and a Criminal Judgment?
There’s a major difference between civil court and criminal court.
A civil court typically involves disputes between two parties. For instance, it could involve a case between two individuals, two organizations, or one organization and one individual. These cases often pertain to a breach of contract, an unsettled debt or a lack of services.
Unless both parties agree to the facts of the case, the judge gives each party the opportunity to present evidence. For example, if a debt collector takes you to civil court for an unpaid bill, you can provide evidence of any payments you made. After hearing the evidence, the judge issues a final judgment, known as a civil judgment.
On the other hand, criminal court involves someone accused of breaking the law. The federal, state, or local government charges the accused party. If, after holding a trial, the defendant is found guilty or the defendant pleads guilty prior to the trial, the judge issues a criminal judgment. A sentence is issued later, which could include jail time or some other form of punishment.
What Can You Do to Avoid a Judgment?
Heading off a lawsuit is the best way to avoid a judgment. To do so, don’t ignore calls and correspondence from your creditor. Reach out to learn if they’ll accept suitable payment arrangements. Educate yourself on smart ways to pay debt collectors, and consider using the services of a debt management agency.
What if the loan company or debt collector has already started the lawsuit? Don’t skip court. Show up and fight. You may win if the statute of limitations has expired.
If you haven’t made a payment on an old debt for many years, you may have a successful legal defense. Most states set the time frame between four to six years. Collectors often still file suit because they win by default if you don’t show up. So, it’s important that you go to court with proof of your last date of payment.
If you successfully defeat or avoid a judgment, don’t stop there. Take some sensible steps to help you get out of and stay out of debt. Adopting these smart financial habits can also help prevent future judgment actions.
Additional FAQs about Judgments
How Long Can the Judgment Creditor Pursue Payment?
The answer depends on where you live, since state laws differ. Some states limit collection efforts to five to seven years. Others allow creditors to pursue repayment for more than 20 years. With the right to renew a judgment over and over in many states, it may last indefinitely.
Judgment renewals may be repeated as often as desired or limited to two or three times. This is another state-specific issue. Judgments can also lapse or become dormant. The creditor must then act within a specific time frame to revive it.
What Happens When You Can’t Pay a Judgment Filed Against You?
If you own a limited amount of property, it may all be exempt from judgment collection efforts. Also, you may not work or only work part-time. With the CCPA cap, that may mean you don’t earn enough for garnishment.
This inability to pay your debt is called being judgment proof, collection proof, or execution proof. While these circumstances exist, the judgment creditor has no legal way to collect on the debt. It’s not a permanent solution. The creditor may revisit collection efforts periodically for many years.
For a more permanent solution, you may want to consider filing bankruptcy. This process can discharge or eliminate most civil judgments for unpaid debt. Exceptions apply for things like child support, spousal support, student loans, and some property liens. Speak with a bankruptcy lawyer to learn whether this will help your situation.
Can You Settle a Judgment?
If you can afford to pay a decent lump sum, you may be able to negotiate a settlement. The judgment creditor may be willing to settle if they fear you will otherwise file bankruptcy. Get the terms and settlement amount you agree upon in writing. Be sure the creditor agrees to file a satisfaction of judgment with the court after they receive your pay off.
Can a Judgment Be Challenged or Reversed?
Challenging and overturning a judgment is difficult but not always impossible. This is the case if there were errors. Perhaps you weren’t notified of the suit or it was never your debt to begin with. Consult with an attorney to find out whether you have grounds to challenge the decision.
If you want to challenge a judgment, act fast. If you received prior notice of the case, you may have up to six months to reopen it. If you weren’t notified, you likely have up to two years to appeal. By reopening the case, you have the opportunity to fight the claim anew.
Do Credit Reports Still Include Judgments?
For many years, credit reports included judgment information. But that changed in 2017. The National Consumer Assistance Plan is responsible for creating more accurate credit data requirements. These changes resulted in the removal of civil debt judgments from credit reports.
Judgments are still a matter of public record. But the NCAP now requires that there be identifying information on these records for more accuracy. That data includes a social security number or date of birth along with the consumer’s name and address.
Public records cannot include this type of identifying information. It would violate privacy laws. This is the reason these judgments are no longer reported on credit files.
How Do You Find Out if You Have Any Judgments Against You?
You should receive a summons when you’re being sued. So, you can expect a default judgment will follow if you don’t show up in court. You can also expect a notification when a judgment is entered against you.
Mistakes happen, though. You may have missed the notice or moved to a new address. If that happens, you may not learn of the judgment until collection actions start.
What if You Find a Judgment on Your Credit Report?
Take action if you learn that judgments are still being reported by Equifax, Experian, or Trans Union. The NCAP eliminated this practice, so if there’s a judgment on your report, this is definitely something that you should dispute. Credit repair services, like Lexington Law Firm*, can help you challenge the errors on your behalf with the credit bureaus and request that they correct your report.
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Disclosure: Credit.com and CreditRepair.com are both owned by the same company, Progrexion Holdings Inc. John C Heath, Attorney at Law, PC, d/b/a Lexington Law Firm is an independent law firm that uses Progrexion as a provider of business and administrative services.
The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
Some credit facts you need to know are your credit score is based on five key factors, FICO credit scores range from 300 to 850, checking your own credit won’t hurt your score, and twelve more facts outlined below.
With all of the misleading and incorrect information about credit floating around, it’s no wonder some of us feel lost when it comes to our credit reports and credit scores. Fortunately, we’re here to help set everything straight with these simple and clear explanations.
We’ve taken the time to compile the most important credit facts you need to know to understand your credit and everything that impacts it. Just as importantly, we’re setting the record straight when it comes to credit myths that have been lingering for too long. Read on to learn everything you’ve always wanted to know about credit.
1. Your credit score is based on five key factors
Most lenders make their decisions using FICO credit scores, which are based on five key factors. That means that when you apply for a new credit card or loan, these are the primary influences on whether you’ll end up getting approved. Here are the five factors, in order of importance: payment history, credit utilization, length of credit history, credit mix and new credit inquiries.
35% – Payment history. Your ability to consistently make payments has the biggest impact on your score. Having late and missed payments is detrimental to your credit score, while a streak of on-time payments has a positive effect.
30% – Credit utilization. Your utilization measures how much of your available credit you’re using across all of your cards. By using one-third or less of your total credit limit, you could help improve your credit.
15% – Length of credit history. In general, having a longer credit history is helpful, though it depends on how responsibly you’ve used credit over time. Using credit well over time signals to lenders that you can be trusted to manage your finances.
10% – New credit. Applying for new credit leads to hard inquiries, which can negatively impact your credit score. Spacing out your new credit applications—and only applying for credit when you need it—helps your score.
10% – Credit mix. Having a variety of different types of credit—like credit cards, an auto loan or a mortgage—can influence your score as well. A diverse credit portfolio demonstrates your ability to successfully manage different types of credit.
With the knowledge of exactly how your score gets calculated, you can make smarter decisions with credit.
Bottom line: Credit scores aren’t as mysterious as they first appear, and you have control over all of the factors that determine your score.
2. Credit reports are different than credit scores
Although they are related, a credit report and a credit score are different. Also, it’s a bit misleading to talk about a single credit report or a single credit score, because the reality is that you have several different credit reports, and your credit score can be calculated in many different ways.
A credit report is a collection of information about your credit behaviors, like the accounts you have and when you make payments. Three main bureaus—Experian, Equifax and TransUnion—each publish a separate credit report about you.
A credit score uses the information in your credit report to create a numerical representation of your creditworthiness. In other words, all of the information in your report is simplified into a single number that gives lenders an idea of how likely you are to repay a debt.
Surprisingly, your credit report does not include a credit score. Instead, lenders who access your report use formulas to determine a score when you apply for credit. The most common scoring models are FICO and VantageScore, but lenders can make modifications to the calculations to give more weight to areas that are more important to them.
Bottom line: You’ll want to be familiar with both your credit reports and your credit scores, as they each play a role in helping you obtain new credit.
3. Negative credit items will eventually come off your credit report
Negative items on your credit report can cause damage to your credit score. Negative items include late payments, collection accounts, foreclosures and repossessions.
Although these items can lead to significant drops in your credit score, their effect is not permanent. Over time, negative items have a smaller and smaller impact on your score, as long as your credit behaviors improve so that more recent items are more favorable.
Additionally, most negative items should remain on your report for seven years at the most due to the regulations set by the Fair Credit Reporting Act. A bankruptcy, on the other hand, can last up to 10 years in some cases.
Bottom line: Negative items can cause a decrease in your credit score, but they aren’t permanent. Start building new credit behaviors and your score can recover over time.
4. FICO credit scores range from 300 to 850
One of the most common credit scoring models is produced by the Fair Isaac Corporation, also known as FICO. While you may hear “FICO score” and “credit score” used interchangeably, there are in fact several different scoring models, so you could have a different credit score depending on which lender or financial institution you’re working with. The score you’re assigned by FICO will usually always be in a range from 300 to 850.
Accessing your FICO score gives you the chance to have a high-level overview of your credit health. Scores that are considered good, very good or exceptional often make it much easier to get new credit cards or loans when you need them. On the other hand, scores that are fair or poor can make getting new credit more difficult.
Here’s an overview of the FICO scoring ranges:
800 – 850: Exceptional
740 – 799: Very Good
670 – 739: Good
580 – 669: Fair
300 – 579: Poor
Remember, though: credit scores are not fixed and permanent. Your score responds to factors like payments, utilization and credit history, so positive decisions now will benefit your score in the long term.
Bottom line: The FICO scoring ranges lay out broad categories to give you a sense of how you’re doing with credit—and can also help you set a goal for where you want to be.
5. The majority of lenders use FICO scores when making decisions
While there are multiple credit scoring models, the majority of lenders check FICO scores when making decisions. That means that when you apply for new credit—whether it’s a credit card, a loan or a mortgage—the score that’s more likely to matter is your FICO score.
That’s important to know, because many free credit monitoring services will show you score estimates or your VantageScore. Some credit card companies provide a FICO score, however, and you can also request to see the credit score that lenders used to make their decision during the application process.
Fortunately, credit scoring models tend to reference the same data and weight factors fairly similarly. That means if you make on-time payments, keep your utilization low, avoid opening up too many new accounts and have a consistent credit history with a variety of accounts, you’ll probably be in good shape regardless.
Bottom line: Knowing your FICO score can help you have an idea of how lenders will view your application for new credit.
6. You have many different types of credit scores
Credit scores vary based on the credit bureau reporting them and the credit scoring model used. The major credit bureaus all have slightly different information regarding your credit history. This means that these three, along with other credit reporting agencies, report several FICO credit scores to lenders to account for different information they’ve collected.
There are also different scores specific to particular industries. For example, auto lenders review different risk factors than mortgage lenders, so the scores each lender receives might differ. Although it can get confusing, the most important things to remember are the five core factors that affect your credit score.
Bottom line: Although many people reference their credit score in the singular, the truth is that there are many different types of credit scores that take into account different factors.
7. Checking your own credit won’t hurt your score
Many people believe that checking their credit score or credit report hurts their credit, but fortunately, this isn’t true. Getting a copy of your credit report or checking your score doesn’t affect your credit score. These actions are called “soft” inquiries into your credit, and while they are noted on your credit report, they shouldn’t have any effect on your score.
Hard inquiries, on the other hand, are noted when lenders look at your credit during an application process—and these can temporarily reduce your score. This is used to discourage you from applying for new credit too frequently. However, the effect is typically small, and after a couple of years the notation of a hard inquiry will leave your report.
Bottom line: You can check your own credit report and credit score without any negative effect—and we actually encourage you to do so to stay on top of your credit health.
8. You can check your credit score and credit reports for free
There are three main ways to check your credit for free. You’ll likely want to take a look at both your credit reports and your credit scores. Here’s how to get a hold of both of those:
You’re entitled to a free credit report once each year by visiting AnnualCreditReport.com, a government-sponsored website that gives you access to your reports from TransUnion, Experian and Equifax.
You may be able to check your credit score free by contacting your bank or credit card company. Additionally, many free services—like Mint—enable you to monitor your score for free. Just make sure to note which kind of credit score you’re seeing, because there are many different scoring methods.
The information you find in your credit report lays out the factors that determine your credit score. By scanning your report closely, you’ll likely find out the best strategy for improving your score—for instance, by improving your payment history or lowering your utilization.
Bottom line: Information about your credit is freely available, so take advantage of those resources to stay on top of your credit report and score.
9. Your credit score can cost you money
Ultimately, the purpose of credit scores is to help lenders determine whether they should offer you new credit, like a loan or a credit card. A lower score indicates that you may be at greater risk for default—which means the lender has to worry that you won’t pay back your debts.
To offset this risk, lenders often deny credit applications for those with lower scores, or they extend credit with high interest rates. These interest rates can cost you a lot of money over time, so working to improve your credit score can have a measurable effect on your financial life.
Consider, for example, a $25,000 auto loan. With a fair credit score, you may secure an interest rate of 5.3 percent—so you’ll pay a total of $3,513 in interest over five years. With an excellent credit score, your rate could drop to 3.1 percent, and you’ll save nearly $1,500 in interest charges over that same five-year period.
Bottom line: A good credit score can have a positive impact on your finances, and a bad score can cost you money in interest charges.
10. Canceling old credit cards can lower your score
If you have a credit card that you’re no longer using, you may be tempted to close the account entirely. Before doing that, though, consider how it could impact your credit score.
Recall that two credit factors are utilization and length of credit history. Closing an old account could affect one or both of those factors when it comes to calculating your score.
Your credit utilization could drop after closing an account because your credit limit will likely be lower. Since utilization represents all of your balances divided by your total credit limit, your utilization will go up if your credit limit goes down (and if your balances stay the same).
Your length of credit history could be lowered if you close an older account that is raising the average age of your credit.
Some people worry that having a zero balance on their credit card can negatively impact their score. This is just a credit myth. A zero balance means you aren’t using the card to make any purchases. Keeping the credit card open while not using it actually works to your benefit. You’re able to contribute to the length of your credit history, while not risking the chance of debt and late payments.
You may need to use the card every now and then to avoid having it closed. Additionally, if the card has an annual fee, you may need to close the card or ask to have the card downgraded to a version that does not have a fee. Still, if there’s a way to keep the card open, it’s often good to do so even if you don’t plan to regularly use it.
Bottom line: An old credit card can benefit your credit score even if you aren’t using it anymore.
11. You can still get a loan with bad credit
It’s true that getting a loan can be more difficult with bad credit, but it’s not impossible. There are bad credit loans specifically for people with lower credit scores. Note, however, that these loans often come with higher interest rates—or they require some sort of collateral that the lender can use to secure the loan. That means if you don’t pay your loan back, the lender will be able to seize the property you put up as collateral.
If you don’t need a loan immediately, you could consider trying to rebuild your credit before applying. There are credit builder loans, which are specifically designed to help you build up a strong payment history and improve your credit in the process. Unlike a traditional loan, you pay for a credit builder loan each month and then receive the sum after your final payment. Since these loans represent no risk to lenders, they’re often willing to extend them to people with poor credit history looking to raise their score.
Bottom line: You can get a loan even with bad credit—but sometimes it’s wise to find ways to raise your score before applying.
12. Credit scores aren’t the only deciding factor for lending decisions
While credit scores are important in lending decisions, lenders may take other factors into account when deciding whether to offer you new credit. For example, your income and employment can play a significant role in your approval odds. Additionally, some loans (like auto loans and mortgages) are secured by collateral that the lender can seize if you default. These loans may be considered less risky for the lender in certain cases because the asset can help offset any losses from nonpayment.
In many cases, your debt-to-income ratio is also an important factor in whether you’re approved for a loan or credit card. Lenders consider your current monthly debt payments (from all sources) as well as your monthly income to determine whether you may be overextended financially.
Two different people may pay $1,500 each month for student loans, a car payment and a mortgage. That said, if one individual makes $3,500 each month and the other makes $8,000 each month, their situations will be considered very differently by a potential lender.
Bottom line: Keeping your credit score high can help you secure credit when you need it, but you’ll want to stay on top of all aspects of your financial health.
13. Your credit report can help you spot fraud
Regularly checking your credit report can help you notice fraud or identity theft. If someone is using your information to open accounts, they will show up on your credit report.
If you notice an account that you did not open, you’ll want to start taking steps to protect your identity from any further damage. You may also want to freeze or lock your credit, which prevents anyone from using your information to open up more accounts.
Bottom line: Reviewing your credit report provides you an opportunity to notice when something is amiss.
14. Joint accounts affect your credit scores, but you do not have joint scores
If you have a joint account with someone else, that account will be reflected on both of your credit reports. For example, a loan that was opened by you and your spouse will show up for both of you—and will affect both of your credit scores. That said, your credit history, credit report and credit score remain separate. No one—including married couples—has a joint credit report or joint credit score.
In addition to joint accounts, you may also have authorized users on your credit card, or be an authorized user yourself. Authorized users have access to account funds, but they are not liable for debts. That means that if you make someone an authorized user on your credit card, they can rack up charges, but you’ll be on the hook if they don’t pay.
Because joint account owners and authorized users can influence credit scores in significant ways, we advise you to be careful about who you open accounts with or provide authorization to.
Bottom line: Even though joint account owners and authorized users can influence someone else’s credit, there are no shared credit reports or joint credit scores.
15. Many credit reports contain inaccurate credit information
The Federal Trade Commission found that one in five people has an error on at least one of their credit reports, and these inaccuracies can greatly impact your credit. (Also see this 2015 follow-up study from the FTC for more information regarding credit report errors.) This is why you should frequently check your credit report and dispute any inaccurate information. For example, since payment history accounts for 30 percent of your credit score, one wrong late payment can significantly hurt your score.
It’s important to get your credit facts straight so you understand exactly how different things impact your score. One of the first things you should learn is how to read your credit report so you can quickly spot discrepancies and ensure that the information reported is fair and accurate.
After scrutinizing your credit report, you can look into other ways to fix your credit, like paying late or past-due accounts, so you can help your credit with your newfound knowledge. You can also take advantage of Lexington Law Firm’s credit repair services to get extra help and additional legal knowledge to assist you.
Bottom line: Your credit report could have inaccurate information that’s hurting your score unfairly. Fortunately, there is a credit dispute process that can help you clean up your report and ensure all of the information on it is correct.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
Reviewed By
Nature Lewis
Associate Attorney
Before joining Lexington Law as an Associate Attorney, Nature Lewis managed a successful practice representing tenants in Maricopa County.
Through her representation of tenants, Nature gained experience in Federal law, Family law, Probate, Consumer protection and Civil law. She received numerous accolades for her dedication to Tenant Protection in Arizona, including, John P. Frank Advocate for Justice Award in 2016, Top 50 Pro Bono Attorney of 2015, New Tenant Attorney of the Year in 2015 and Maricopa County Attorney of the Month in March 2015. Nature continued her dedication to pro bono work while volunteering at Community Legal Services’ Volunteer Lawyer’s Program and assisting victims of Domestic Violence at the local shelter. Nature is passionate about providing free knowledge to the underserved community and continues to hold free seminars about tenant rights and plans to incorporate consumer rights in her free seminars. Nature is a wife and mother of 5 children. She and her husband have been married for 24 years and enjoy traveling internationally, watching movies and promoting their indie published comic books!