5 Common Questions About Credit Scores


Kelby Jennissen, Personal Banker, Fargo South, Member FDIC

Working in the banking industry, it seems that everyone you meet has questions regarding their credit score. Everyday thousands of commercials are aired about the importance of your credit score, how you can protect it, and where you can find a “totally free” credit score; yet the vast majority of people know very little about their score. I have looked at hundreds, if not thousands, of credit reports and have compiled a list of the most common questions.

Q: What do banks do with my credit score?
A: Your score is a risk indicator depicting the likelihood that you will repay your loan in accordance with the original terms and conditions. A high score indicates a lower level of risk, which can lead to a lower interest rate.

Q: Who calculates my credit score?
A: Your credit score is calculated by the big three credit reporting agencies (Experian, Equifax and TransUnion). Each agency records your credit repayment history and enters it into a mathematical formula created by FICO (Fair Isaac Corporation). This formula is broken down into 35% of your repayment history, 30% in amounts owed, 15% in length of credit history, 10% in types of credit used, and 10% in new credit*. This is why it is extremely important to make your payments on time, as this is the biggest factor when calculating your score.

Q: My car payment was due on the 15th and I just paid it on the 18th, is this going to hurt my credit score?
A: Generally no. Most creditors only report a payment as late to the credit reporting agencies when it reaches the 30 day mark, however, be careful, as not making your payment on time can lead to late fees and unwanted phone calls from your lender!  If you have any questions about when your specific creditor considers your payment late for credit reporting purposes, you should ask the creditor.

Q: How long does a late payment stay on my credit report?
A: A long time! A late payment, Chapter 13 bankruptcy, foreclosure, collection or other public records will generally show up on your credit report for seven years. Chapter 7 bankruptcies generally show for 10 years, and a tax lien may be indefinite. Save yourself the worry; live within your means and make your payments on time.

Q: What is considered a good credit score?
A: Generally speaking there is no set number for a “good” or “bad” credit score. As long as you are paying your bills on time and do not have any judgments, collections, or bankruptcies, you are doing just fine. That being said, generally anything higher than a score of 700 is considered good, and 760 or higher is excellent!

Hopefully this has answered some questions about credit scores you may have. If you would like more information, please visit www.myfico.com or visit with your local FIB&T loan officer!




As a Personal Banker, Kelby assists customers        with a variety of banking needs with special focus on consumer lending and is located at our 25th Street branch in Fargo.

In his spare time, Kelby enjoys spending time with his friends and family, exploring the outdoors and playing basketball.

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