Understanding Credit

Credit scores affect so much of our finances. But do you know how credit scores are calculated? Or what a "good" credit score is? Let's get started on understanding your credit profile — and how to strengthen it and make it work for you.

 

Misconceptions exist about how credit scores are calculated, but it doesn't have to be a mystery. Credit scores are based on several factors, including your payment history (which accounts for 35% of your score) and how much you owe on loans and credit cards (30%). Learn more about how credit scores are calculated.

 

When you apply for a loan, credit card, or other type of credit, you can be sure that the lender will check your credit score. So why not check your own score first to make sure there are no surprises?

Wells Fargo Online® makes checking your FICO® Credit Score easy — it's free1 and updated monthly. Checking it never affects your score so check as often as you like. Discover more about how to access your credit score.

 

Once you know your score, you can see how it stacks up. Any credit score above 700 is considered a "good" score. A score at that level or higher will typically allow you to qualify for credit as long as you have enough collateral to satisfy the lender and your debt-to-income ratio, or DTI, isn't too high (under 35% is ideal). If you'd like to improve your score, check out these tips for taking your credit from good to great.

1 You must be the primary account holder of an eligible Wells Fargo consumer account with a FICO® Score available, and enrolled in Wells Fargo Online®. Availability may be affected by your mobile carrier's coverage area. Your mobile carrier's message and data rates may apply. Eligible Wells Fargo consumer accounts include deposit, loan, and credit accounts. Other consumer accounts may also be eligible. Contact Wells Fargo for details.

Please note that the score provided under this service is for educational purposes only and may not be the score used by Wells Fargo to make credit decisions. We may use other FICO® Score versions and other information when you apply for credit. There are many factors that Wells Fargo looks at to determine your credit options; therefore, a specific FICO® Score or Wells Fargo credit rating does not necessarily guarantee a specific loan rate, approval of a loan, or an automatic upgrade on a credit card.

FICO is a registered trademark of Fair Isaac Corporation in the United States and other countries.