Credit Scores Overview
A credit score is a 3-digit number summarizing your creditworthiness. Credit scores range from 300 to 900. The higher your score, the more creditworthy you are.
Lenders use credit scores to evaluate lending risk. Credit scores are calculated from credit reports using factors like payment history, debt amounts, credit history length, new credit applications, and credit types used. Most lenders use FICO or VantageScore models. Although models differ, score interpretations are similar.
You can access your credit score through credit card statements, banks, or by purchasing credit report packages. Monitoring your score provides insights on your overall credit health. Multiple scores from different bureaus exist because lenders report uniquely to them. But scores indicate the same creditworthiness.
Impact of Late Payments
A single late payment can lower scores by up to 110 points. Several late payments can lower scores up to 150 points. Older delinquent payments matter less. Recent missed payments signal current risk. After catching up on payments, scores typically recover in 3 to 6 months.