Credit & Debt

Know the difference between how much you owe (debt) and how much you can borrow (credit). Learn how to manage both to avoid financial trouble and understand how credit scores are calculated.

Frequently Asked Questions
  • Do lenders all use the same credit score?

    Most lenders use FICO credit scores, although some use a rival credit score called the Vantage score. The type of FICO or Vantage score can vary depending on the type of loan being applied for.  For example, lenders use a specific score variation from one of the major score providers for credit cards vs a mortgage or home equity line of credit.

  • What are the most important components of credit?

    The most important components of credit include history of on-time payments, types of credit owned, amounts owed and credit utilization. Another thing that goes into a person’s credit score is the length of credit history, which means the age of the oldest account on file.

  • Is a credit card different from a line of credit?

    A credit card is a card-based form of payment that has a revolving credit line. It is different from a line of credit that is typically a standalone loan with a set loan amount that can be accessed as needed with a check. Once a check is written against a line of credit principal and interest is paid back in installments.

  • What behaviors affect credit scores?

    Credit scores can be positively or negatively affected by consumer behavior such as paying balances owed on or before the due date, the percentage of utilization of credit lines and the number of credit accounts that are open.

  • What things get reported to credit bureaus

    Lenders report the opening and maintenance of credit accounts to credit reporting companies each month that accounts are open. Account balances, payment behavior and account status (such as current, overdue or in default) are also reported.

Key Terms

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