How Banks Determine Your Credit Score

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Which Credit Scores Do Banks Use?

Many banks and credit unions provide credit scores to account holders and credit card customers. These scores are calculated using credit report data from one of the three national credit bureaus: Experian, TransUnion, or Equifax. The bureau that provided your credit data should be indicated along with the score.

Common credit scores provided by banks include:

• Generic credit scores: These include versions of the FICO® Score (300 to 850) and VantageScore® (300 to 850 for versions 3.0 and 4.0, and 501 to 990 for versions 1.0 and 2.0).
• FICO Bankcard Score: This score ranges from 250 to 900 and is tailored to predict the likelihood of paying credit card bills.
• FICO® Score NG: This score ranges from 150 to 950 and is used by some lenders in their lending decisions.

Can I Trust the Score From My Bank?

Yes, you can trust the credit scores reported by your financial institution. They accurately reflect your credit history as it appears on the credit report upon which the score is based. However, the credit score your bank provides for free may not be the same one a lender will use when considering your application for credit.

Should I Check My Credit Score Elsewhere Before Applying for Credit?

Regularly checking your FICO® Score or VantageScore will give you a good idea of your overall credit standing. When you’re ready to apply for a loan or credit card, a more comprehensive approach may give you a better idea of how lenders will view your application. Checking a generic credit score based on your credit report from each of the three credit bureaus will give you a good idea of where you stand.

Can I Get My Credit Report Through My Bank?

No, you can’t get your credit report from a bank. The credit scores financial institutions offer are based on the information in credit reports, but those credit reports exist separately and are maintained by the three national credit bureaus. To ensure your scores accurately reflect your credit history, it’s important to check your credit reports regularly for inaccuracies and signs of unauthorized activity.

How to Check Your Credit Report

You can get credit reports from:

• The national credit bureaus: You can access your Experian report for free and also check your FICO® Score 8 based on Experian data for free.
• AnnualCreditReport.com: You have the right to access your credit reports from all three bureaus at AnnualCreditReport.com.

How to Improve Your Credit Score

If you’ve been tracking your credit score through your financial institution without seeing improvement, you may need to adopt some new habits to increase your scores. Here are some tried-and-true approaches:

• Make payments on time: Timely debt payments will tend to raise your scores, while just one payment that’s 30 days or more overdue can cause a dramatic score drop.
• Reduce revolving debt: Keep your credit utilization ratio under 30%, but the lower your utilization, the better for your scores.
• Check your credit reports: Regularly check for inaccuracies and dispute any discrepancies with the relevant credit bureau.
• Pay off collections: Paying off collection accounts may improve your scores, as some newer credit scoring models ignore paid-off collection accounts.
• Seek new credit only as needed: Multiple hard inquiries in close succession can have a cumulative negative effect on your scores.
• Consider Experian Boost®: Enrolling in this free feature can add on-time payments for recurring expenses to your Experian credit report, potentially improving your FICO® Scores based on Experian data.

The Bottom Line

Checking credit scores through your bank can be a great way to track your progress at building your credit. By checking your free Experian credit report, you can help ensure the ongoing accuracy of your scores. With time and good credit habits, you can expect your score to show steady improvement.

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