Credit Basics


When you apply for credit, your FICO® Score can influence the credit limit, interest rate, loan amount, rewards programs, balance transfer rates, and other terms that lenders will offer you.

FICO® Scores are used by lenders in connection with a wide variety of credit products including:

  • Credit Cards
  • Auto Loans
  • Mortgages
  • Home Equity Lines & Loans
  • Personal Loans & Lines of Credit
  • Student Loans

Lenders can get your FICO® Scores from all three of the major U.S. credit reporting agencies (TransUnion, Equifax and Experian). Your FICO® Score from each agency may be different because the FICO® Score is based solely on the specific credit information in that agency's credit file, and not all lenders report to all three credit reporting agencies. Even in instances where the lender reports to all three credit reporting agencies, the timing of when information from credit grantors is updated to your credit file may create differences in your scores across the three credit reporting agencies.


The best advice is to manage your financial responsibilities over time. Here are some tips and notes for managing your financial health.

Pay on Time

  • Always pay your bills on time Late payments and collections can have a major impact on your FICO® Score. Also, note that paying off a collection account, or closing an account on which you previously missed a payment, will not remove it from your credit report. It will stay on your report for seven years.
  • If you have missed payments, get current and stay current The fewer times your payments are late and the longer that you pay your bills on time, the better off you can be. If you've had a hard time paying your bills on time, consider signing up for an automated bill payment service. You can enroll online in AutoPay for your credit card account on the Payments & Transfers tab.
  • If you are having trouble paying your bills Contact your creditors or seek help from a non-profit credit counseling agency. A legitimate credit counseling agency can work with your creditors to lower your monthly payments. If you can begin to manage your credit responsibly and understand the benefit of paying bills on time, this can help your credit health over time.

Manage Your Accounts

  • Keep your balances low High balances on your credit cards and other revolving credit can lower your FICO® Score. You may want to increase the amounts of your monthly payments until all balances are manageable.
  • Have credit cards, but manage them responsibly In general, having credit cards doesn't hurt your FICO® Score if you make payments on time. People without credit cards, for example, tend to be slightly higher risk than people who have shown they can manage credit cards responsibly.
  • Do not open cards that you don't need While your available credit amount might increase, this behavior could backfire and lower your FICO® Score. New accounts can lower the average time you've had credit accounts established, which can lower your FICO® Score. Keep in mind: Even if you have used credit for a long time, opening a new account can still lower your FICO® Score.
  • Close unused credit cards cautiously Owing the same amount but having fewer open accounts may actually lower your FICO® Score. You may want to keep balances very low on your active credit cards when you close unused cards.
  • It's OK to request and check your own credit report Every 12 months you are entitled by law to one free credit report from each credit reporting agency through Checking your own credit report will not harm your FICO® Score.

When Seeking New Credit

Re-establish your credit history if you've had problems in the past Opening new accounts responsibly and paying them on time each month can help to develop a deep history for your FICO® Score in the long term. Don't forget to keep paying all your other accounts on time. Just one delinquency reported on your credit report can set you back. Remember to avoid applying for credit you do not need.

For answers to the complete set of potential questions you may have about FICO® Scores, download the complete FICO® Score FAQs or FICO Consumer Education.

FICO is a registered trademark of Fair Isaac Corporation in the United States and other countries. First Bankcard and FICO are not credit repair organizations as defined under federal or state law, including the Credit Repair Organizations Act. First Bankcard and FICO do not provide "credit repair" services, advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating.

All FICO® Score materials are Fair Isaac proprietary information. © 2018 Fair Isaac Corporation. All rights reserved.