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A New Look for Credit Scores

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This week, the three major credit reporting agencies announced a new way of calculating credit scores. The move is meant to give you a better understanding of how the score is determined, and how much credit you can carry.

The New Scale

The so-called 'VantageScore' more closely resembles an academic scale.

A - 901-990

B - 801-900

C - 701-800

D - 601-700

F - 501-600


Source: Experian, The Associated Press

Tips: Improving Credit Scores

Here are a few factors that affect your credit score and suggestions on how to improve your score over time.

Pay bills on time. Bills paid late, or worse, referred to a collections agency, will reflect negatively on your score.

Don't open new accounts before applying for credit. Inquiries into your credit history that occur when you apply for an account can lower your score. While having a credit history is a positive, opening too many credit card accounts can count against you. Pre-screened credit card offers — and routine checkups from credit reporting agencies, do not affect your score.

Reduce debt, but don't rush to close accounts. Closing accounts can actually reduce your credit score. Instead of closing accounts before applying for credit, you should...

Lower balances. Keeping balances close to your spending limit will typically reduce your credit score.

Source: Federal Trade Comission, Equifax


Liz Pulliam Weston, author, Your Credit Score: How to Fix, Improve, and Protect the 3-Digit Number that Shapes Your Financial Future

Kerry Williams, group division president of Experian Credit Services; leader of Experian's team involved in creating the new credit scoring system

Bonnie Daniels, vice president of human resources at MiTek Industries, Inc., a software engineering company