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  • Your credit score is based on your credit report and helps lenders assess your credit risk.
  • Establish good credit by making on-time payments and keeping your balance low compared to your credit limit.
  • Having a long credit history and a diverse credit portfolio will help maintain good credit.

Learning how to establish and maintain good credit will help you achieve future financial goals, which may include getting a credit card or buying a car or home.

1. What is in your credit report?

Your credit report contains four important areas of information:

  • Personal: Name, address, Social Security number, date of birth, and employment information
  • Credit history: Types of accounts, the date you opened the account, your credit limit or loan amount, the account balance, and payment history
  • Public records: Bankruptcies, foreclosures, garnishments, legal suits, and judgments
  • Inquiries: List of creditors that accessed your credit report in the last two years

2. What makes up your credit score?

A credit score is a number based on a snapshot of your credit report that helps a lender determine your ability to pay back debt (your score = your credit risk). Fair Isaac's FICO® score is widely used and is based on the following factors:


What makes up your credit score?
  • Payment history: Looks at items such as late payments and bankruptcies. These defaults can hurt your credit score.
  • Amounts owed: Considers your debt and your available credit lines. The more you owe compared to your credit limit, the lower your score will be.
  • Length of credit history: Checks how long you had your credit accounts and how often you use them. A longer credit history will usually increase your FICO score.
  • New credit: Looks at new credit accounts you opened and new credit requests, such as credit cards. Multiple credit requests represent greater credit risk.
  • Types of credit used: Considers how many credit accounts and how many installment-type accounts you have. A diverse credit portfolio can strengthen your report.

3. What does your credit score mean?

The subjective descriptions below such as Excellent, Very Good, Fair, etc. are for illustrative purposes only. While having a higher credit score signals a lower credit risk to potential lenders, loan decisions tend to be based on many other factors besides just a credit score.

What does your credit score mean?

4. How do you monitor your credit?

  • You can request a free copy of your credit report on an annual basis. is a centralized service for consumers to request free annual credit reports. It was created by federal law and implemented by the three nationwide consumer credit reporting bureaus: Equifax, Experian, and TransUnion.
  • The Federal Trade Commission Identity Theft Website is a national resource to help you deter, detect, and defend against identity theft. Consumers can learn how to avoid identity theft and what to do if their identities are stolen.

FICO® is a registered trademark of Fair Isaac Corporation and is not affiliated with Discover® Student Loans.

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