Frequently Asked Questions

What is a Credit Score?

A credit score is a three-digit number calculated to indicate your creditworthiness. The higher
the score, the more creditworthy you are to a lender. A credit score is calculated from the
information in your credit report and considers your on-time payments, the length of your
payment history, your mix of different types of credit accounts, and other such factors. It is
important to know that your score does not take your age, income, employment, marital status,
or your bank account balances into account.
You can learn more about credit scores and scoring models from the Consumer Financial
Consumer Financial Protection Bureau
website: //www.consumerfinance.gov/ask-cfpb/what-is-a-credit-score-en-315/

What is VantageScore®?

VantageScore® was founded by the 3 leading credit reporting agencies – Experian, Equifax,
and TransUnion. This credit score model was developed by a representative team of
statisticians, analysts, and credit data experts from each of the credit reporting companies, and
is used by hundreds of institutions, including credit unions, banks, credit card issuers, and
mortgage lenders.
The VantageScore® 4.0, the score that is shown in SavvyMoney Credit Score, is a newer and more popular
version of VantageScore®. It is calculated on a scale of 300-850, with 300 being the lowest and
850 the highest score.

What Does a “Good” Credit Score Mean to Me?

A good score may mean you have easier access to more credit and lower interest rates. The
consumer benefits of a good credit score go beyond the obvious. For example, underwriting
processes that use credit scores allow consumers to obtain credit much more quickly than in the
past.

What Factors Influence My Credit Score?

Five major categories make up a credit score:

40% Payment History

Essentially, lenders want to know whether you’re good about paying your loans on time.

23% Credit Usage

Credit usage, also known as credit utilization, is the ratio between the total credit used and your
total credit limit on your revolving accounts. It is best to keep your credit usage below 30%.

21% Credit Age

The average of your oldest open credit accounts to your newest open credit accounts
determines your credit age. In general, the longer your credit history the better, particularly
accounts with a good payment history and no late payments.

11% Credit Mix

It’s important to have a mix of different types of credit like revolving credit and installment loans.
Your score will likely be higher if you have a good payment history with both, installment loans,
like student loans and mortgages, and revolving credit, like credit cards.

5% Inquiries

Any time you apply for a credit card, or a lender checks your credit for a loan, it’s known as an
inquiry. Hard inquiries show on your credit report when your credit is pulled by a lender for a car
loan, mortgage, or credit card. However, soft inquiries don’t show on your credit report and
occur when you check your credit, or a lender pre-approves you for an offer.
Applying for several credit cards or opening multiple credit accounts in a short period creates
hard inquiries and could signal an increased credit risk to a lender.

Do race, age, and other, non-credit related factors affect my VantageScore® credit
score?

One of the most important misperceptions about credit scores is what information the
VantageScore® model, or any credit scoring model for that matter, is NOT used. The
VantageScore® model does not consider race, color, religion, nationality, sex, marital status,
age, salary, occupation, title, employer, employment history, where you live or where you shop.