Why do FICO® scores matter?
90% of top lenders use FICO® Credit Scores, including us. That’s why Discover provides a FICO® Score, as opposed to another type of credit score. Regularly seeing your score can help you prepare for the future, stay on top of your credit, or avoid surprises.
How is my FICO® score calculated?
Your Score is calculated using positive and negative information on your TransUnion® credit report. It summarizes your risk to lenders at a specific point in time. FICO® Scores consider the following 5 categories of information. The breakdown below illustrates the significance of these categories for the general population. Note, however, that your individual score may give some factors more or less important based on the information in your credit report.
Payment history: 35%
Amount you owe: 30%
Length of credit history: 15%
New credit opened: 10%
Types of credit you have: 10%
Why did my score change?
The FICO® Score we provide you is based on the information in your TransUnion® credit report at a snapshot in time. As the information in your credit report changes, your score may also change. According to FICO, 89% of the population experiences changes to their score by up to 20 points month to month.
Why is my FICO® Credit Score different than other credit scores I’ve seen?
The score Discover provides may be different than other scores you’ve seen for several reasons:
Discover provides your FICO® Score 8. Lenders use several different kinds of FICO® Scores, depending on the type of loan they provide.
Discover provides your score from data on your TransUnion® credit report. Scores may vary when using data from your Experian or Equifax credit report.
The score Discover provides is a snapshot of your info at a moment in time and will often vary from month to month. Be sure to note your ‘as of’ date when you view your score.
Discover provides a FICO® Score because 90% of top lenders use FICO® Scores in their decisions. Credit scores that are not FICO® Scores may show other results.
What if I don’t agree with my score or key factors?
Your FICO® Credit Score is based on a snapshot of the current information in your TransUnion® credit report. Your score can fluctuate month to month, but if you believe there is an error, you can:
How can I affect my score?
Good financial habits like consistently paying bills on time, keeping balances low and only opening new credit cards when necessary can all have a positive effect on your financial health, and in turn, your FICO® Score. Review your Credit Scorecard to see how you’re doing. And keep in mind, poor financial habits like paying late can harm your score.
If I apply for a mortgage, how will it affect my FICO® Score
FICO® Scores look at the number of times a person applies for credit, including a mortgage since lenders tend to see people who are actively seeking credit as more risky. Typically, inquiries have only a small impact on your score. Late payments, the amount you owe, and the length of time you’ve used credit have much more importance. FICO® Scores consider inquiries less over time if no new inquiries occur.
How can applying for a new credit affect my score?
When you apply for credit, you voluntarily allow a lender to review your information. This is called a “Hard” Credit Inquiry on your credit report. For many people, one Hard Inquiry will have no effect on their score. Others may see a slight impact. Many Hard Inquiries in a short amount of time could affect your score. But applying for new credit only accounts for about 10% of a FICO®Score, so the impact is relatively modest.
If paying off a loan, how will it affect my credit score?
In most instances, paying off a loan has a neutral effect on credit scores. Payment history and the amounts owed are two of the most important factors affecting FICO® Scores, so paying off a loan does not negatively impact your score.
How can opening a new account affect my average credit age and my score?
Even though your available credit might increase, opening a new account may still lower your FICO® Score. That’s because new accounts can lower the average age of your credit history, and lenders consider newer credit riskier. Consider not closing your oldest account—keeping it open helps improve the average age of your credit. The Length of your Credit History accounts for about 15% of your FICO® Score.
What’s the difference between Hard and Soft Credit inquiries? Which can affect my score?
Hard Inquiries could affect your FICO® Credit Score. Hard Inquiries occur when you apply for an auto loan, mortgage, credit card, or another type of loan and voluntarily permit lenders to review your credit. Too many Hard Inquiries in a short amount of time may lead lenders to think you’re stretching your finances too thin.
Soft Inquiries do not affect your FICO® Credit Score. Soft Inquiries are all inquiries outside of when a lender reviews your credit application. They include when you check your own credit and when credit card issuers send you offers to become their customer.
Getting your FICO® Credit Score from Discover requires a Soft Inquiry and has no effect on your score.
