What score does Experian use? This is a question that often comes up when discussing credit scores and the services provided by Experian, one of the three major credit reporting agencies in the United States. Understanding the score that Experian uses is crucial for individuals who want to monitor their credit health and take steps to improve it.
Experian uses a credit scoring model called the FICO Score, which is developed by the Fair Isaac Corporation. The FICO Score is widely recognized and used by lenders to assess the creditworthiness of borrowers. It is a three-digit number ranging from 300 to 850, with higher scores indicating better creditworthiness.
Factors Affecting the Experian FICO Score
Several factors contribute to the Experian FICO Score. The most significant factors include:
1. Payment history: This accounts for 35% of the score and includes late payments, missed payments, and the number of accounts with late payments.
2. Amounts owed: This makes up 30% of the score and considers the total amount of debt compared to the credit limits on all accounts.
3. Length of credit history: This accounts for 15% of the score and evaluates the age of the oldest account and the average age of all accounts.
4. New credit: This contributes 10% of the score and looks at the number of recently opened accounts and the number of recent inquiries.
5. Credit mix: This accounts for 10% of the score and considers the types of credit accounts you have, such as credit cards, retail accounts, installment loans, and mortgages.
Improving Your Experian FICO Score
Now that you know what score Experian uses, you may be wondering how to improve your FICO Score. Here are some tips:
1. Pay your bills on time: Late payments can significantly damage your credit score, so make sure to pay your bills on time every month.
2. Keep credit card balances low: High credit card balances can negatively impact your score, so try to keep your balances below 30% of your credit limits.
3. Limit new credit applications: Applying for too many new credit accounts can lower your score, so be selective about when and why you apply for new credit.
4. Monitor your credit report: Regularly check your credit report for errors and dispute any inaccuracies with the credit reporting agencies.
5. Diversify your credit mix: Having a mix of credit accounts, such as credit cards, loans, and mortgages, can positively impact your score.
Conclusion
Understanding what score Experian uses, the factors that affect it, and how to improve it can help you take control of your credit health. By focusing on these areas, you can work towards achieving a higher FICO Score and improve your chances of securing favorable lending terms in the future. Remember that maintaining a good credit score is an ongoing process, so stay proactive and monitor your credit regularly.
