Credit scores don’t need to be a mystery. Here are some of the most frequently asked questions we get at Merchants Bank about credit scores. Your Merchants Bank mortgage lender can answer any additional questions you might have.

Click on a question to see the answer.

A credit score is a number calculated to rank the creditworthiness of a person.
The actual formula for calculating a credit score has never been revealed by the Federal Trade Commission, however we know the score is based primarily on credit report information from the credit bureaus. This information generally includes information on your outstanding debt, credit history and length, credit type (bank cards vs. retail or department store cards) and inquiries into your credit score.

In order to establish a credit score, you will need one credit account open for six months or more and enough information in your credit report on which to base a credit score.

Once you have an established credit score, it is used for approving new accounts, increasing lines on existing accounts, determining what rate you will pay for a loan and reissuing or cancelling cards.

Different companies use different credit score scales, but typically scales generally range from 300 to 850 or 350 to 950. The higher the score the better the credit risk; the lower the score the worse the credit risk.

Download this pdf or follow the instructions below.

The three nationwide consumer reporting companies have one central website, toll-free telephone number, and mailing address through which you can order your free annual report. To order:

Do not contact the three nationwide consumer reporting companies individually. They are only providing free annual credit reports through Annual Credit Report by the options listed above.

Through Annual Credit Report, you may order your reports from each of the three nationwide consumer reporting companies at the same time, or you can order from only one or two. The law allows you to order one free copy from each of the nationwide consumer reporting companies every 12 months.

Children can get their credit reports from the agencies listed above. Children under the age of 13 should have their parent or legal guardian request the information. Information about the child needed for a written request may include:

  • Legal name
  • Address
  • Birthdate
  • A copy of the child’s birth certification
  • A copy of the child’s social security card

You will also need to provide documentation identifying yourself as a parent or legal guardian.

A low credit score may have been impacted by any of the following factors:

  • Serious delinquency
  • Serious delinquency and public record or collection filed, such as foreclosures, bankruptcies, judgments 
  • Derogatory public record or collection file 
  • Time since delinquency is too recent or unknown 
  • Level of delinquency on accounts 
  • Number of accounts with delinquency
  • Amount owed on accounts
  • Proportion of balances to credit limits on revolving account too high
  • Length of time accounts have been established
  • Too many accounts with balances

There is no quick fix to improving your credit score. A better score is the result of good credit history, which takes time to build. However, by taking the below steps you may be able to improve your score over time:

  • Pay your bills on time. If you have any collections or past due payments, you want to pay them as soon as possible.
  • Keep balances on your credit cards and other revolving credit (such as a line of credit) low. Using up most of the available balance or maxing out a credit account can affect your score.
  • Apply for and open credit accounts when you need them. Trying to improve your mix of credit by opening new accounts typically won’t impact your score.
To learn more about credit scores, watch our five part video series on credit on YouTube.