How High Can Your Credit Score Go?

If you're like most Americans, obtaining and maintaining a good credit score is important to you. In the United States, there are different credit score ranges. We often get asked by our visitors, how high can their credit score go? We will explain this in much detail below?

How High Can Your Credit Score Go?

Your credit score can go as high as 850 and as low as 350. A credit score above 740 is considered to be very good and anything above 800 is considered to be exceptional. The higher your credit score, the better your odds will be for being approved for a credit card or loan. This is so because persons with a good or high credit score pose little risk to lenders when compared to persons with poor credit or a low credit score.

To get the highest credit score, you must have good credit history, meaning you must have made all of your payments on time, you have low balances on your accounts, you must not have applied for too many credit card within a short period of time, you must have old accounts, and you must have no negative items on your credit report.

Achieving the highest credit score is not an easy task as it takes years of borrowing and repaying money on time without ever having missed a payment. Some people spend over a decade of building their credit to attain the highest credit score. So, if you want to get your credit score to go as high as it can go, you should keep in mind that it will take a long time to achieve.

Also, you should keep in mind that you have three credit scores, one from each of the credit reporting bureaus. You have a credit score from Experian, Equifax, and Transunion. If you have ever checked your credit report, you may have noticed that each of your credit scores is slightly different from the other ones. So, although you may have the highest credit score of 850 with one of the credit bureaus, your other scores may be lower because each credit reporting bureau has different information on which to base your credit score.

Credit Score Range (Highest Credit Score Possible vs Lowest Credit Score Possible)

Exceptional credit score - 800 to 850
Very good credit score - 740 to 799
Good credit score - 670 to 739
Fair credit score - 580 to 669
Poor credit score - Under 580

The higher your credit, the more likely you are to be approved for the credit card or loan that you apply for. You're more likely to be approved with a higher credit score because you present a lower risk to lender since people with a high credit score have demonstrated the ability to borrow money and pay it back on time. As such, you're rewarded by being approved and approved at a lower interest rate than someone else with poor credit.

Asking how high your credit score and go is a great thing because this means that you understand that having a high credit score is essential to be able to do things, such as opening a credit card, financing or leasing a car, taking out a loan to buy a home, or even rent an apartment.

By knowing how high can your credit score go, you know where your credit score falls. Also, it allows you to set goals for how much you need to improve your credit score to reach that ultimate 850 credit score.

How To Get Your Credit Score as High as it Can Go?

Here are a few tips on how to raise your credit score:

  • Payments - The biggest factor impacting your credit score is your payment history, so if you want to improve your credit score, the first thing that you should do is to make your payments on your credit cards and loans on time. Your payment history accounts for 35% of your credit score, so make sure to pay your accounts on time for the best boost to your credit score.
  • Balances - The second biggest factor impacting your credit score is your account balance. It accounts for 30% of your credit score. To improve your credit, you should pay down as much of your balances as you can to improve your credit score. As a rule of thumb, you should strive to keep your account balances between 5% and 10% and never use up 30% or more of your available credit.
  • New Credit - If you want to improve your credit score, you should stay away from applying for too many credit cards or loans within a short period of time. This is so because every time you apply for a credit card or a loan, a hard inquiry is added to your credit report. Although a single hard inquiry will not lower your credit score by much, having too many inquiries within a short period of time can significantly lower your credit score.
  • Old Accounts - If you want to improve your credit score and to see how high it can go, you should keep your old accounts open. This is so because your average account age makes up 15% of your credit score. Since keeping old accounts open increases your overall account age, you should keep them open as this will help your credit score.
  • Credit Report - To help your credit score, you should get into the habit of periodically checking your credit report. If you check your credit report and you find incorrect information on your credit report, you should file a dispute with the credit bureau reporting the incorrect information to have it removed from your credit report. Negative information that's incorrectly reported could significantly lower your credit score.

Is it Possible to get an 850 Credit Score?

It is possible to get an 850 credit score, but it will take years of following good credit habits to achieve the highest possible credit score of 850. Persons who have achieved a perfect credit score of 850 have flawless payments history for more than a decade, meaning that they have never missed a payment on a credit card or loan for more than 10 years. Additionally, they have used credit responsibly, never having a negative mark added to their credit report. So, if you want to get the highest credit score, you must have patience and you must be responsible when it comes to using credit.

Can Your Credit Score Be Too High?

We often get asked whether a person can have a credit score that's too high? The short answer is: no. In the United States, having a high credit score is a great thing because it opens the door to many great options. The higher your credit score, the better the approval odds you will have for credit cards and loans. Also, when you're approved for credit cards and loans, the higher your credit score, the better the interest rate you'll get, and the better your repayment terms will be. So, it's definitely worth it to raise your credit card as high as possible.

What is the Average Credit Score?

According to Value Penguin, the average credit score in the United States is 695. Some people have a higher credit score while others have a lower credit score. An average credit score of 695 will qualify you for things such as credit cards and loans, however, you might not get the best terms and interest rates with such a credit score. To get the best terms, you should improve your credit score.

Bottom Line

If you were wondering how high can your credit score go, you now know that the highest possible credit score is an 850 credit score. Obtaining a perfect credit score of 850 is not an easy task, in fact, many people who have reported achieving this credit score have stated that it took them over a decade of opening accounts and responsibly repaying them to achieve it. If you have any general questions or comments, please feel free to leave them in the comments section below.


When Do Late Payments Get Reported to the Credit Bureaus?

Maintaining a good credit score is essential if you live in the United States. If you have a credit card, auto loan, or home loan, you and you made your patement late, you might be wondering when do late payments get reported to the credit reporting bureaus? We will answer this question in much detail below.

When Do Late Payments Get Reported to the Credit Bureaus?

Late payments get reported to the credit reporting bureaus only if you're payment is 30 or more days past due. Once your account is past due for 30 or more days, you will not know when the payment is reported as paste due because different creditors and lenders report to the credit reporting bureaus at different times. As such, there is no definite date when your late payment will be reported to the credit reporting bureaus. But a good rule of thumb is to wait 60 days for the late payment to be reported to the credit bureaus.

Impact of Late Payments on Your Credit Score

You should avoid making a payment that's more than 30 days late at all costs. A single late payment can lower your credit score by more than 150 points. The better your credit score, the bigger the drop you will experience. If you already have poor credit, a late payment will still lower your credit score but not more than someone with a good or excellent credit score.

That said, if you're 30 days late on your payment, you should try to make the payment even though you're late. This is so because if you become 60 days, 90 days, or 120 days late, these negative marks will be added to your credit report. The more late you become on making your payments, the more damage you will cause to your credit.

Late payments will remain on your credit report for 7 years from the date you first became delinquent on making payments on your account. For example, if you missed a payment on January 1st, 2022, the late payment will remain on your credit report until January 1st, 2029.

After 7 years, late payments will automatically be removed from your credit report. Having said that, as the late payment ages, its impact on your credit score will lessen until it's ultimately removed from your credit report.

Now that you know that late payments are only reported once a person is 30 or more days late if you're less than 30 days late, you should try to make your payment to save your credit. For example, if you're only 1 to 29 days late, you still have an opportunity to make your payment before any damage occurs to your credit.

What Happens If You Make a Late Payment?

If you make a late payment on your credit card, personal loan, car loan, or home loan, a negative mark will be added to your credit report after the lender reports that you've been 30 or more days late on making your payment.

In addition to having a negative mark added to your credit report, your lender will most likley charge you late payments fees for every payment that you miss. Additionally, if your late on making a credit card payment, a penalty APR may kick in raising the interest that you pay on the amount you owe them.

If you have money and are able to pay your loan or credit card, you should pay them as nonpayment comes with many consequences that will make paying back the money that you owe more difficult and more expensive.

If you're a month or two late, you should ask your card issuer or lender to waive the late fees in exchange for you making the account current. Many lenders will be willing to work with you because it's better for them if you continue to make payments on your account.

In the event that you're not able to make your account current, you should ask your lender about the options that you have instead of just ignoring the past due amount and racking up a ton of late fees and additional charges. Some lenders may be able to push a payment or two back or even place you on a payment plan where are pay a lesser amount that's due.

How Long Does a Late Payment Stay On Your Credit Report?

A payment that is reported as late will remain on your credit report for 7 years from the date you missed the payment. After 7 years, the payment will be automatically removed from your credit report. In the event that your late payment is not removed within the 7 year period, you can file a dispute with the credit bureau reporting the late payment to have it removed from your credit report.

Disputing Incorrect Information On Your Credit Report

If a late payment shows up on your credit report even though you were never late in making payments on your account, you should either contact the lender reporting the incorrect information or you can file a dispute with the credit reporting bureau that's reporting the incorrect information.

For example, if you have a late payment showing up on your Transunion Credit Report, you should dispute the late payment with Transunion to have it removed from your credit report.

Also, if the account is reported late with the two remaining credit reporting bureaus, you should file a dispute with each of them, as well. Filing a dispute with only one bureau will correct only that credit report. You must file a dispute with each of the credit reporting bureaus reporting the incorrect information.

After you have filed a dispute, the credit reporting bureaus will conduct an investigation to determine whether the information is indeed incorrect. If the investigation reveals that you are right and the info is incorrect, they will remove it from your credit reporting bureaus. It usually takes the credit reporting bureaus a maximum of 30 days to conduct the investigation, but usually, the credit bureaus finish much more soon than that.

What Should You Do If Your Payment is Late?

If you're under 29 days late on making your payment, you should try to make the payment if you can. This is so because if your payment is under 30 days late, paying it will prevent your creditor and lender from reporting the payment as late. Payments are only reported as late when they are 30 days or more late.

Also, if you're more than 30 days late, you should still try to make your payment because if your payment is 60 days, 90 days, or 120 days late a 60, 90, or 120-day late mark will be added to your credit report reflecting how long you've been late on making your payment. The longer that you leave an account unpaid, the more damage you'll be doing to your credit.

Credit Score Planet Frequently Asked Questions (FAQs)

1. How are late payments reported to the credit reporting bureaus?

Late payment are reported to the credit bureaus by your lender or creditor. For example, if you have a credit card with Wells Fargo and you're 31 days late on making your payment, Wells Fargo will report your late payment to the credit reporting bureaus according to their own reporting schedule.

2. How long will a 30-day late payment affect your credit score?

A 30-day late payment will affect your credit score for 7 years from the date you were late. That said, the impact a late payment has on your credit report will lessen as the late payment mark ages.

3. How much can a late payment lower your credit score?

A single 30 day late payment can lower your credit score by as much as 180 points. So, it's best to avoid one if you can.

4. Does a 3 or 5-day late payment affect your credit?

No, a payment that is less than 30 days late will not affect your credit score because late payments are only reported as late if it is 30 days or more late.

5. Will a 1-day late payment affect your credit score?

No, a 1 day late payment will not affect your credit score because a 1 day late are not reported. Only payments that are 30 or more days late are reported to the credit reporting bureaus.


Can I Get a Secured Credit Card With a 500 Credit Score?

Whether you're just starting to build your credit or you have a bad credit score, such as a 500 credit score, you might be wondering whether you can get a secured credit card with a 500 credit score? We will answer this question in much detail below.

Can I Get a Secured Credit Card With a 500 Credit Score?

Yes, you may be able to get a secured credit card with a 500 credit score because card issuers know that consumers with bad credit still need a credit card, as such, they offer consumers the ability to obtain secured credit cards where the risk to the card issuer is reduced by having you place a security deposit with the card issuer.

Secured credit cards are different from regular unsecured credit cards in that to obtain a secured credit card, you must place a deposit with the card issuer. The security deposit then determines your credit limit.

For example, if you place a $700 security deposit, the card issuer will give you a credit card with a $700 credit limit. Usually, card issuers will give you back your security within 12 to 18 months if you use your secured credit card responsibly and make your payments on time.

However, if you default on making payments on your secured credit card or you want to close the account while the card has a balance on it, the card issuer will use the security deposit to pay off your outstanding balance. The remainder of the security deposit, if any, will be returned to you.

If you have a 500 credit score, getting an unsecured credit card will be very difficult because your credit score is in the bad category. Lenders will see you as extremely risky to lend money to. As such, if you have a 500 credit score, your best option is to apply for and obtain a secured credit card. By paying a deposit, you represent a lower risk to the card issuer, and so they are more likely to allow you to borrow money from them.

When it comes to building and improving your credit, a secured credit card will allow you to build your credit just as would a regular unsecured credit card. This is so because your secured account status is reported to the credit reporting bureaus, so making your payments on time will help your credit score.

Can You Improve Your 500 Credit Score With a Secured Credit Card?

Absolutely, yes. Opening a secured credit card is one of the best ways for those who do not have credit and those who have bad credit to improve their credit. This is so because a secured credit card works the same way as does a regular unsecured credit card.

So, if you open a secured credit card and you make your payments on time, this information will be reported to the credit reporting bureaus, improving your credit score.

Those with no credit will be able to improve their credit score much more quickly than someone with bad credit. This is so because a person with no credit does not have any negative information on his credit report to drag down his or her credit score.

Nevertheless, secured credit cards are a great tool for consumers who want to build their credit from scratch or improve their bad credit.

So, if you want to improve your 500 credit score and you've been denied a regular unsecured credit card, you should explore the option of applying for a secured credit card to improve your credit.

How to Get a Secured Credit Card?

To get a secured credit card, you should first find a secured credit card, such as the Bank of America Secured Visa Credit Card or the Discover It Secured Credit Card. You should then submit your credit application online or by visiting one of the card issuers branches.

When you go to the secured credit card application, you will have to provide personal information, such as your name, date of birth, social security number, employment status, and income. Additionally, you will have to provide a security deposit to obtain the card.

Providing a security deposit is done by either giving the card issuer cash if you're applying in person or by providing your checking account information if you're applying online.

If you're approved, your security deposit will be deducted from your checking account, and your secured credit card will be mailed to you.

What Are the Best Secured Credit Cards For Someone With a 500 Credit Score?

If you have a 500 credit score, here are some of the best secured credit cards that you can apply for today.

  • Bank of America Secured Visa Credit Card - The Bank of America Secured Visa Credit Card is a great option for someone who wants a simple and straightforward credit card. This card comes with a $0 annual fee and you can deposit a security deposit of up to $4,900 for a $4,900 credit limit. The minimum deposit amount is $300 for a $300 credit limit. Also, the card comes with the ability to make contactless payments by tapping your credit card to pay. Unfortunately, this card does not come with any rewards, making it great for someone who wants a straightforward secured credit card with no annual fee.
  • Discover It Secured Credit Card - The Discover It Secured Credit Card is a great secured credit card that comes with a $0 annual fee. The great thing about this credit card is that it's one of the few secured cards that offer rewards. You can earn 1% cashback on all purchases, and 2% cashback on restaurant and gas station purchases. If you're approved for this credit card, you will be granted access to check your credit score for free.
  • Capital One Secured Mastercard Credit Card - The Capital One Secured Credit is a great option for someone who wants a simple credit card with a $0 annual fee. This card does not offer rewards but can be had for as little as a $49 security deposit that will unlock a $200 credit limit. You can increase your security deposit for a higher credit limit. The page for this credit card also states that every 6 months your account will be reviewed by Capital One. If you've used your card responsibly and you've made your payments on time, Capital One will consider raising your credit limit without you having to increase your security deposit.
  • First Progress Secured Credit Card - The First Progress Secured Credit Card comes with a $49 annual fee, however, the card more than makes up for it with an ultra low-interest rate of 9.99%. The other secured credit cards that we have included all come with a high-interest rate that ranges from 22.99% to 24.99%. So, if you're looking for a card with a low-interest rate, this card is the right one for you. The great thing about this card is that no minimum credit score is required, so whether you're just starting to build credit or you want to improve your bad credit, this is the right card for you.

How To Improve Your 500 Credit Score?

If you aren't approved for a regular unsecured credit card because you have a 500 credit score, there are a number of things that you can do to improve your 500 credit score.

Payments

The best thing that you can do to improve your 500 credit score is to make all of your credit card and loan payments on time. This is so because your payment history makes up 25% of your credit score. So, making your payments on time should boost your credit score.

Credit Utilization

The second best thing you can do to improve your credit score is to reduce the balances on your accounts. This is so because 20% of your credit score depends on the amount of your avaialble credit that you're using. The higher your balances, the lower your credit score will be. As a rule of thumb, you should strive to keep your credit utilization between 5% and 10% and to never use more than 30% of your available credit. Reducing your account balances may boost your credit score.

Reduce Applications

To improve your 500 credit score, you should refrain from submitting too many credit card and loan applications within a short period of time. This is so because every time you apply for a credit card or a loan, a hard inquiry is placed on your credit report. Although a single hard inquiry will only lower your credit score by 5 to 10 points, racking up too many hard inquiries can significantly reduce your credit score. So, to improve your credit, avoid applying for unnecessary credit cards and loans.

Keep Old Accounts Open

To improve your 500 credit score, you should keep your old accounts open. This is so because your overall average account age affects your credit score. The older your accounts, the better your credit score will be. So, although it may be tempting to close an old account or credit card, you should keep it open to improve your credit.

Check Your Credit Report

If you're not already in the habit of checking your credit report, you should periodically check your credit report. You can do this by signing up for any of the free credit report services currently available. Review your credit report and dispute any inaccurate items that appear on your credit report to improve your credit score.

Credit Score Planet Frequently Asked Questions (FAQs)

1. What is the Difference Between a Secured vs Unsecured Credit Card?

The only difference between a secured vs unsecured credit card is that a secured credit card requires you to place a security deposit with the card issuer before your credit card account is opened for you. Other than that, a secured credit card functions the same exact way as does a regular credit card

2. Can I get a regular credit card with a 500 credit score?

You may be able to get a regular credit card with a 500 credit score, however, it will be very difficult to get approved with such a low credit score. A 500 credit score is considered as very poor, so most card issuer will probably deny you if you apply for one.

3. How fast can you build credit with a secured credit card?

If you're just starting to build your credit, you can build credit with a secured credit card in as little as 6 months, however, if you're fixing your bad credit, it may take longer to improve your credit score. Some consumers have reported being able to improve their bad credit within as little as 12 to 18 months after opening and making timely payments on their secured credit card.

4. What is the minimum credit score for a secured credit card?

There is no set minimum credit score for a secured credit card. Card issuers offering secured cards know that consumers who apply for these cards are either starting off or have bad credit. As such, so long as you have the money for the security deposit, you should be approved for a secured credit card.


Does Financing a Phone Build Credit?

Smartphone prices around the world are always increasing, making purchasing a cell phone in cash difficult. so, if you're like many people in the United States, you've probably considered financing a phone. We often get asked: Does financing a phone build credit? We will answer this question in much detail below.

Does Financing a Phone Build Credit?

In most cases, financing a phone through a wireless carrier will not help you build credit. When you finance a phone, your account status is not reported to the credit reporting bureaus. Therefore, whether you make your payments on time or don't make them at all, they will not be reported to the credit reporting bureaus and will therefore not affect your credit.

That said, with some phone makers, such as Samsung and Apple, financing a phone with them directly may help you build credit, so if you make your payments on time, you will build good credit.

This is so because when you finance a phone through Apple or Samsung, they are essentially opening a line of credit for you, which is usually reported to the credit reporting bureaus as would a credit card. In such a situation, making payments to finance a smartphone will help you build credit so long as you make your payments on time.

Financing a Smartphone With a Wireless Carrier

When you purchase a cellphone or smartphone and agree to a payment plan with a wireless carrier, such as AT&T, T-Mobile, Sprint, or Verizon, your phone payments will not help you build credit because phone payments and bills are not reported to the credit reporting bureaus, so if you think that making phone payments will help your credit, you're mistaken as they will not help your credit. The same applies if you miss payments. If you miss payments, the missed payments will not affect your credit as your account is not reported to the credit reporting bureaus.

Financing a Smartphone With Apple

If you want to finance an iPhone or any apple product with Apple, Apple will open a credit card through which you can finance your phone. The Apple Card is reported to the credit reporting bureaus. So, making payments on an iPhone will help you build credit. If you miss any payments, you could cause significant damage to your credit. This is so because the status of your Apple Card is reported to the three major credit reporting bureaus. As such, your payment history will affect your credit score.

Does Financing a Phone Affect Your Credit?

When you first open a wireless account or apply to lease or finance a smartphone, the wireless carrier may conduct a credit check. That said, wireless carriers often conduct what is known as a soft pull or soft inquiry to review your credit when determining whether to allow you to finance or lease a phone. A soft inquiry does not affect your credit score, as such, it will not lower your credit score.

That said, if you're financing a phone directly with Apple or Samsung, a hard inquiry may be placed on your credit report. This is so because Apple and Samsung open a line of credit for you to allow you to finance one of their smartphones. A line of credit almost always results in a hard inquiry on your credit report.

A single hard inquiry could lower your credit score by a few points, but the impact is negligible and shouldn't keep you up at night.

Also, if you finance a smartphone through Apple or Samsung, missing a payment could hurt your credit score because the status of your line of credit account is reported to the credit reporting bureaus. As such, if you make payments, you will build credit, and if you miss payments, you will damage your credit.

Does Paying Your Phone Bill Build Credit

Now that you know that leasing or financing a phone with a wireless carrier does not build credit nor does it affect your credit, does paying your phone bill build credit? No, paying a phone bill will not help you build credit. That said, Experian has launched a service known as Experian Boost that allows you to improve your credit score whenever you pay your phone bill. However, a phone bill will not affect your credit unless you subscribe to Experian's service. Also, paying or failing to pay a phone bill will not affect your credit score with Transunion and/or Equifax.

Other Ways to Build Credit

If you're just starting to build your credit or you have bad credit, one of the best ways to build credit is to obtain a secured credit card. A secured credit card works the same way as does a regular credit card, the only difference between the two is that with a secured credit card, you will have to place a security deposit with the card issuer.

If you use the secured card as agreed, the security deposit will usually be returned to you within 12 to 18 months. However, if you stop making your payments on time, the security deposit will be used to satisfy your outstanding balance.

That said, if used properly, a secured credit card will help build your credit just as would a regular unsecured credit card.

So, if you want to build credit without financing a phone to build credit, a secured credit card is a great way to do so.

Credit Score Planet Frequently Asked Questions

1. Will financing a smartphone help my credit?

Financing a smartphone or any phone through a wireless carrier will not help your credit because your account status is not reported to the credit reporting bureaus. However, if you finance a smartphone through Samsung or Apple, making payments on your phone could help your credit because they typically open a line of credit on which you make payments.

2. Does paying a phone bill help your credit?

No, paying a phone bill will not help your credit. However, if you signup for Experian Boost, paying your phone bill could help your credit. That said, generally speaking, paying a phone bill will not help your credit.

3. How can I improve my credit score?

You can improve your credit score by making payments on your loans and credit cards on time, reducing the balances on your accounts, keeping old accounts open, and refraining from submitting too many credit applications within a short period of time.

4. Can a phone company ruin your credit?

Yes, a phone company or wireless can ruin your credit. The way this typically happens is that if you leave an unpaid balance on your account for too long, the phone company may sell the unpaid debt to a collection agency. The collection agency will then add a collection account to your credit report while attempting to recover the debt. A single collection that's added to your credit report can cause significant damage to your credit.


Will Disputing Items On Credit Report Hurt My Credit Score?

If you're like many Americans and you have uncovered an error on your credit report, you may be thinking about disputing the error to have it removed from your credit report. So, does disputing an inaccurate item on your credit report hurt your credit score? We will explain this in much detail below.

Will Disputing Items On Credit Report Hurt My Credit Score?

No, disputing any inaccurate or incorrect items on your credit report will not hurt your credit score even if the dispute is unsuccessful. That said, if the negative item that you're disputing on your credit report is removed, the removal will raise your credit score. So, if you find an inaccurate item on your credit report, you should not hesitate to dispute it.

For example, if you disputed a collection account that does not belong to you and the dispute results in the removal of the collection account, you will see a significant boost in your credit score, especially if you had a high credit score, to begin with.

However, if the item you disputed is not removed from your credit report, you will see no change in your credit score as it will remain the same.

The same applies if you are able to successfully remove a late payment, charge off, an account settled for less than the full balance and any other derogatory mark that may appear on your credit report.

That said, removal of or correction of inaccurate information, such as the misspelling of your name or an incorrect address with neither hurt nor help your credit score because it's not the type of information that's factored into your credit score.

In most situations, a dispute will take 30 days to complete a dispute from the date that you filed it. Once your dispute is processed and the investigation is completed, the credit reporting bureau with witch you filed your dispute will inform you about the status of the dispute.

So, now that you know that disputing an item on your credit report will not hurt your credit score, how long does a negative item stay on your credit report.

How Long Does a Negative Item Stay On Your Credit Report?

A negative mark, such as a late payment, foreclosure, or repossession will stay on your credit report for 7 years from the date that you first became delinquent on making payments on your account. For example, if you failed to pay a credit card bill that was due on January 1st, 2022, a late payment notice will remain on your credit report until January 1st, 2029.

After 7 years, the mark will be automatically removed from your credit report. If for any reason, the negative mark is not removed after 7 years of appearing on your credit report, you should file a dispute with the credit reporting bureau reporting the negative information and asking them to remove it. After you've made the request, the credit reporting bureau will conduct an investigation, and if they find that the derogatory mark has expired, they will remove it from your credit report.

The best thing to ensure that a derogatory mark is not added to your credit report is to always make your credit, loan, and other bill payments on time. This ensures that you do not owe anyone money and that your credit report remains free of derogatory marks.

How to Dispute an Item on Your Credit Report?

Before disputing an item on your credit report, you need to pull all three of your credit report. You should then examine your credit reports to find any incorrect or derogatory information.

If you find negative information that is incorrect or does not belong to you, you should dispute it with the credit reporting bureau reporting the inaccurate information.

For example, if you review your Transunion credit report and you find a collection account that does not belong to you or a late payment where you were not late, you should file a dispute with Transunion.

Each of the three major credit reporting bureaus (Transunion, Equifax, and Experian) offer consumers the ability to file dispute for free online.

Just follow the instructions that they've provided to submit your dispute.

After submitting a dispute, the credit reporting bureaus have 30 days to conduct an investigation to verify the accuracy of the information you've disputed.

If the credit reporting bureaus conclude that your claim is correct and the information that's being reported is incorrect or does not belong to you, they will remove it from your credit report.

How Will the Results of Your Dispute Affect Your Credit Score?

If you have disputed a derogatory mark (negative item), such as a late payment, or collection that does not belong to you, the removal of such an item will likely result in a significant boost to your credit score, so long as no other negative information is dragging down your credit score.

However, if your dispute is not successful and the credit reporting bureau decides not to remove the derogatory information because they've concluded that it's valid, there will be no impact on your credit score, meaning your credit score will not go down merely because you filed a dispute and were unsuccessful in removing the negative item from your credit report.

So, if you believe that there is inaccurate or negative information on your credit report, you will not lose anything from filing a dispute in an attempt to have it removed.

Items That Are Usually Disputed On a Person's Credit Report

Here are some of the most commonly found errors that you can dispute on your credit report:

  • Your closed account still being reported as open
  • An account that does not belong to you being reported on your credit report
  • An account that appear as being paid late when you've paid on time
  • A collection account that does not belong to you appearing on your credit report
  • Incorrect information, such as the wrong name, address, or phone number on your credit report
  • The same account being listed twice on your credit report
  • Incorrect installment account or credit card balance being reported
  • Incorrect credit limit being reported
  • An account that appears on your credit report due to fraud committed by another

Will Disputing an Item on My Credit Report Work?

Disputing a valid item on your credit report is unlikely to remove it from your credit report. This is so because when you file a dispute, the credit reporting with which you filed a dispute will conduct an investigation to determine whether the item you've disputed is valid or invalid. If the investigators find that the information contains inaccurate or incorrect information, the item you've disputed will be removed from your credit report. However, if the investigation reveals that the item is indeed valid, it will remain on your credit report. Disputing an item on your credit report will not hurt your credit score. However, if you're successful in disputing negative information, you could see a boost in your credit score.

Are You Required To Dispute an Item With All Three Credit Reporting Bureaus?

You will only need to file a dispute with the credit reporting bureau reporting the negative information. For example, if a negative item that does not belong to you appears on your Transunion Credit Report, you will only need to file a dispute with Transunion. However, if an item, for example, appears on your Transunion and Experian Credit Reports, you will need to file a dispute with both credit reporting bureaus.


Does Paypal Credit Affect Your Credit Score?

If you've ever logged into PayPal and saw the term "PayPal credit" or were shopping and saw that you can purchase an item using PayPal credit, you may be wondering whether PayPal credit affects your credit score? We will answer this question in much detail below.

Does Paypal Credit Affect Your Credit Score?

Yes, PayPal credit does affect your credit score because when you apply for PayPal Credit, you're essentially applying for a line of credit, and Paypal's partner Comenity Capital Bank will conduct a review of your credit report. Since the partner conducts a review of your credit report, a hard inquiry will appear on your credit report, slightly lowering your credit score.

The hard inquiry that's added to your credit report as a result of a credit check will remain on your credit report for 2 years from the date that Comenity Capital checks your credit report. After 2 years, the hard inquiry will automatically be removed from your credit report.

Experts agree that hard inquiries will only affect your credit score for 12 months, after which their effect will begin to decrease until they're ultimately removed from your credit report.

That said, even though applying for PayPal Credit will result in a hard inquiry, the status of the your account is not reported to the credit reporting bureaus, so whether you make payments or fail to make them, such activity will not affect your credit because it's not reported to the credit reporting bureaus.

Why Do Consumers Use Paypal Credit?

Many people choose to use Paypal Credit because it allows them to finance their purchases, as well as make payments after 6 months of making the purchase without paying any interest. Paypal credit is available at any merchant that offers you the ability to pay with PayPal. Paypal promotes this service by advertising that you can be approved for Paypal credit in seconds.

That said, before you apply for PayPal Credit, you should know that by simply applying, you're authorizing Paypal and its partner to access your credit report, which will result in a hard inquiry being added to your credit report because you're essentially opening a line of credit to finance your purchase.

That said, the benefit for using PayPal Credit is that you get 6 months to pay off your purchase without paying a single dollar in interest. So, it might be worth it for some consumers to use PayPal Credit, but keep in mind that a hard inquiry will be placed on your credit report.

Although a single hard inquiry will not hurt your credit score by much, if you submit too many credit applications within a short period of time, you could significantly lower your credit score. As a rule of thumb, you should leave approximately 6 months between each hard inquiry that's added to your credit report.

How Does The No Interest For 6 Months Offer Work?

According to PayPal's website, if you make a purchase of $99 or more, you will not be charged any interest on the transaction so long as you pay the balance within 6 months of making the purchase. However, if you do not pay the balance within 6 months, you will be charged interest from the date of the purchase. So, if you do choose to use PayPal credit and you want to take advantage of the no-interest offer, you should pay off your purchase within 6 months of making it, otherwise, you will be charged interest.

How Can You Apply For PayPal Credit?

If you're interested in PayPal Credit, you can apply for it directly on the PayPal website or through an online merchant where you shop. For example, if you're shopping at an online merchant, you will be given the option to pay using PayPal credit when you select PayPal as your payment method. Once you click on PayPal credit, you will have to add some information and submit your application. Your application will take a few seconds to process, and you will either be approved or denied for PayPal credit. If approved, a line of credit will be opened for you, and you can then use that line of credit to make purchases through PayPal.

Bottom Line

At this point, you may know that applying for PayPal credit can affect your credit score because of the hard pull of your credit. However, hard pulls, commonly known as hard inquiries, will only lower your credit score by a few points. If you have too many hard inquiries on your credit report, you should try to minimize the amount of new credit applications that submit, however, if you have little to no inquiries, you shouldn't worry too much about adding a single inquiry to your credit report to apply for PayPal Credit.


Can I Get a Credit Card With a 500 Credit Score?

If you're just starting to build your credit or you have poor credit, you still need a credit card. Almost all shopping and bill payments are done online. So, can you get a credit card with a 500 credit score? We will discuss the answer to this question in much detail below.

Can I Get a Credit Card With a 500 Credit Score?

With a 500 credit score, it will be very difficult to get a regular credit card because a 500 credit score is considered to be poor, and most major card issuers will likely deny your credit card application as they require a fair or good credit score. That said, although you may not be able to qualify for a regular unsecured credit card, you may be able to qualify for a secured credit card.

A secured credit card works exactly the same exact way as a regular credit card, however, to get a secured credit card, you must place a security deposit with the card issuer. The security deposit you place will usually determine your credit limit.

For example, if you want a secured credit card with a $500 limit, the card issuer will require that you place a $500 security deposit at the time you apply for the credit card.

If your application for a secured credit card is approved, the card issuer will deduct the security deposit from the account you added to your credit card application. The card issuer will then keep the security deposit and only use it if you fail to pay the credit card.

However, if you make all of your payments on time, card issuers will usually return the security deposit to you within 12 to 18 months of opening your secured credit card. Also, if you have an excellent payment history, the card issuer may convert your secured credit card into a non-secured regular credit card and return your security deposit to you.

Also, if for any reason you decide to close your secured credit card, your security deposit will be returned to you so long as your credit card has a $0 balance at the time of account closure.

Credit Cards You Can Get With a 500 Credit Score

As previously mentioned, it will be extremely difficult to qualify for a regular credit card with a 500 credit score, so here is a list of secured credit cards that are suitable for someone with a 500 credit score:

  • Bank of America Secured Credit Card
  • Capital One Secured Mastercard
  • Discover it Secured Credit Card
  • OpenSky Secured Visa Credit Card
  • First Progress Secured Credit Card

How Getting a Secured Credit Card Can Help You Improve Your 500 Credit Score

Getting a secured credit card will definitely help you improve your 500 credit score because secured credit cards function the same way as does a regular credit card. As such, they can help you improve your credit whether you're just starting off or you need to repair your credit.

That said, if you're using a secured credit card you will be able to improve your 500 credit score much quicker than would a person who has bad credit and wants to improve it.

That said, regardless of whether you're repairing your credit or building it from scratch, you can use a secured credit card to build your credit just as you would with a regular credit card.

So, if you're approved for a secured credit card, make sure to spend only as much as you can afford to pay off at the end of the month and make all of your payment in full and on time.

If you're just starting off, you should see a significant improvement within the first six months, however, if you're repairing your credit, it will take you a little longer and you should expect an improvement within 12 to 18 months of using and paying off your credit card on time.

Improving a 500 credit score is very important if you want to qualify for credit cards and loans at reasonable interest rates and favorable repayment terms. So, use your secured credit card responsibly and make your payments on time to begin improving your credit.

What Do You Need To Open a Secured Credit Card?

If you have a 500 credit score and can't get a regular unsecured credit card, you should open a secured credit card.

To open a secured credit card, you will need to fill out a secured credit card application by adding basic information, such as your name, address, social security number, income, and your banking information. Your banking information is required so that if you're approved for a secured credit card, the security deposit will be deducted from the account that you provided.

That said, you should keep in mind that the security deposit that you place with the card issuer will determine your credit limit. For example, if you place a $700 security deposit, the card issuer will give you a $700 credit limit.

You should keep in mind that the security deposit will not be used as a payment on your credit card, instead, the security deposit is used to compensate the card issuer in the event that you have a balance on your credit card and you stop making payments on your account.

So, if you default on paying off the credit card, you will give up your security deposit and you will cause significant damage to your credit. So, make sure to make your payments in full and on time.

Things You Can Do To Improve Your 500 Credit Score To Get The Credit Card That You Want

If you have a 500 credit score and you want to get a regular unsecured credit card, here are some tips that you should implement to improve your credit score.

Payment History

The first thing that you should do to improve your credit score is to make all of your credit card and loan payments on time. This includes making payments on your secured credit card on time. Your payment history accounts for 35% of your credit score, so making all of your payments on time will significantly improve your credit score. Missing even a single payment can cause significant damage to your credit. So, make your payments on time and you will notice an improvement in your score.

Balances

The second thing you can to improve your 500 credit score is to pay down the balances on your accounts. Your credit utilization (how much of your available credit you're using) accounts for 30% of your credit score. So, the more you can lower your balances, the more of an improvement in your credit score you will see. As a rule of thumb, you should keep your credit utilization between 5% to 10% but never exceed 30%. If your credit utilization exceeds 30%, you will notice a significant drop in your credit score. So, pay down your balance to improve your 500 credit score.

Application

To improve your 500 credit score to get the credit card that you want, you should avoid applying for too many credit cards and loans within a short period of time. This is so because every time you submit a credit application, a hard inquiry is added to your credit report. While a single hard inquiry will not lower your credit score by much, having too many hard inquiries on your credit report within a short period of time will significantly lower your credit score. So, avoid submitting too many applications and you should notice an improvement in your score.

Account Age

If you have old accounts that are open, you should leave them open to increase the overall age of your accounts. The average age of your accounts makes up 15% of your credit score. The older your accounts, the better your credit score will be. So, if you have an old account that you barely use and want to close, you should leave it open to avoid lowering the average age of your accounts.

Credit Report

If you're not already in the habit of checking your credit report, you should periodically check your credit report to ensure that there is no negative information lowering your credit score. If you find negative information that does not belong to you, you should file a dispute with the credit reporting bureau reporting the incorrect information to have it removed from your credit report so that it no longer pulls down your score.

Bottom Line

At this point, it should be clear that getting a credit card with a 500 credit score will be very difficult. So, instead of applying for a regular credit card, you should apply for a secured credit card. Secured credit cards work the same way as does a regular credit card, and so they will allow you to build your credit and improve it. Once you've improved your credit score, you can then apply for a regular credit card.


Do Overdrafts Affect Credit Score?

If you're like many of us, you may have overdrawn your checking account, causing a negative balance to show up. Also, you may have noticed that your bank or credit union may have charged you an overdraft fee for going over your available balance. We often get asked whether overdrafts affect your credit score? We will answer this question in much detail below.

Do Overdrafts Affect Credit Score?

Overdrafts do not affect your credit score because the status of your checking account is not reported to the credit reporting bureaus. Since it's not reported to the credit reporting bureaus, it will not appear on your credit report, nor will it be factored into your credit score. So, if you have an overdraft on your account, it will not affect your credit score.

That said, if you leave an account with an unpaid overdraft or negative balance for too long, your bank may sell the negative balance that you owe them to a collection agency, the collection agency will then attempt to collect the money from you. In the process of collecting the money, the collection agency may add a collection account to your credit report. A single collection account on your credit report can lower your credit score by up to 100 points. So, if you have an overdrawn account, you should pay off the overdraft to prevent damage to your credit.

Do Checking and Savings Accounts Appear On Your Credit Report?

The status of your checking and savings accounts is not reported to the credit reporting bureaus as is the status of your credit cards and loans. The status is not reported because checking and savings accounts are not used to borrow money. So, if you have an overdraft on one of your accounts, the overdraft is not reported on your credit report.

Since the status is not reported, it will not impact your credit, nor will it lower or raise your credit score. So, opening a checking account, making deposits, and making withdrawals have no effect on your credit score.

That said, even though your checking and savings accounts are not reported to the credit reporting, there is a system that tracks the status of these types of account.

The status of your checking and savings account is reported to the ChexSystems. Using ChexSystems, you will find information on checking accounts that you've opened, overdraws on your accounts, negative balances that were left unpaid for too long, as well as any involuntary closures of your accounts.

So, although negative items on your checking or savings accounts are not reported to the credit reporting bureaus and will not affect your credit score, the negative information will appear on your ChexSystems report. You could be denied when attempting to open an account if too much negative information is on your ChexSystems.

Should You Enable Overdraft Protection For Your Checking Account?

If you live paycheck to paycheck and you're barely maintaining enough money in your checking account to cover your bill payments and transactions, you may significantly benefit from setting up overdraft protection on your checking account.

In the event that you don't have sufficient funds in your checking account, setting up overdraft protection will allow transactions to be approved even if you don't have sufficient funds in your checking account to cover the transaction.

That said, overdraft protection is not free, in fact, most banks will charge you a fee that usually ranges around $35 for every transaction that you make, which leaves a negative balance on your account.

For example, if you go into the Apple Store to purchase a $1,500 Macbook Pro and you only have $1,000 in your checking account. If you have overdraft protection enabled on your checking account, the transaction at the Apple Store will be approved even though you didn't have sufficient funds in your checking account to cover the transaction.

So, if you make a lot of use of your checking account and often go into the negative, you should enable overdraft protection if you want your transaction to be approved. However, if you don't mind your transaction being declined when you have insufficient funds, you can go ahead and cancel your overdraft protection.

That said, there is a second type of overdraft protection that allows you to make transactions that exceed the available balance in your checking account, but instead of the bank covering the transaction, the funds would be withdrawn from a savings account that you've linked to your checking account in the event of an overdraft. Overdraft fees are significantly lower when you pull money from your savings account instead of the bank lending you the money.

When Will An Overdraft Affect Your Credit Score?

Although having an overdraft on your account will not directly affect your credit score because the status of your checking and savings account is not reported to the credit reporting bureaus and therefore does not appear on your credit report, nor does it affect your credit score.

That said, there is one situation where an overdraft could indirectly affect your credit score. If you leave an overdraft (negative balance) on your account for too long, your bank or credit union may sell the outstanding balance to a collection agency. The collection agency will then attempt to collect the balance from you.

In the process of collecting the balance, the collection agency may place a collection account on your credit report. A single collection account can drop your credit score by as much as 100 points. So, if you want to prevent hurting your credit, you should never leave a negative balance on your checking or savings account for too long as you may find yourself in this unfortunate situation.

Credit Score Planet Frequently Asked Questions

1. Do overdrafts affect your credit score?

No, overdrafts do not affect your credit score because checking and savings account are not reported to the credit reporting bureaus and therefore do not appear on your credit report. Since they do not appear on your credit report, they're not factored into your credit score.

2. Are overdrafts reported to the credit reporting bureaus?

No, overdrafts are not reported to the credit reporting bureaus.

3. Should I set up overdraft protection?

If you frequently go over your checking account's available balance and you want your transactions to go through even though you don't have enough money in your checking account to cover the transaction, you should enable overdraft protection. That said, you should keep in mind that every time you go over your available balance and cause your account to become overdrawn, your bank will charge you an overdraft fee. This fee usually ranges in the $35 range.

4. What happens if I can't pay my overdraft?

If you can't pay an overdraft, your account will continue to show a negative balance. That said, if you keep a negative balance for too long, your bank may close your account and sell the negative balance to a collection agency. The collection agency may then damage your credit.