What's something you've always wondered about credit but been afraid to ask?

What's something you've always wondered about credit but been afraid to ask?
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Financial experts and novices will tell you the same thing: credit is complicated!

Credit building basics aren’t part of most schools’ curricula, and the credit bureaus don’t make it easy to understand their scoring systems, so it’s no surprise that we have questions :thinking:

So don’t be shy - let us know: What have you always wondered about credit, but been afraid to ask?

Or, if you feel like you’re already a bona fide credit master :trophy: chime in with answers to other folks’ questions, or share something you’d previously wondered about for a long time.

To kick things off, I’ve never been super clear on the difference between freezing your credit and locking it - and I have a freeze on my own credit report :sweat_smile:

This is a judgment-free zone, so let the learning begin! :books:


Ok I don’t the answer to your question sorry but since you asked! I have a question that seems pretty dumb but I really would like to know the answer.

Is it all in my imagination or is a lot harder to rebuild credit than to build credit from scratch? As a young person starting out I had a easy time going form no score to a high 700 score just with applying for one credit card (granted I didn’t use it much and always paid it off) After having some ‘troubles’ with money over the years and late payments etc it seems to be taking ages to get back to a score in the good range let alone excellent range. I’m doing everything right now. Is this just the way the system is set up or am I doing something wrong?


Hello and welcome to the forum, @hifromben. I don’t think it’s your imagination. Once your scores are high, it can take up to three years to recover completely from even a minor misstep, such as a missed payment. More serious issues can take longer.

It’s also easy to set yourself back when you’re trying to recover from troubled credit. If your balance on even one credit card gets too high, that can stall or even reverse your progress. It also helps to have both revolving accounts (credit cards) and installment loans (personal loans, mortgages, auto loans or student loans) reporting to all three bureaus.

Can you tell us what you’ve been doing to get your credit back on track? We might have some suggestions to help you with that process.


thank you lweston, well I have paid all my payments on time for over a year and half on my car loan and my card and I am only using half credit balance on my card. If I pay down the card balance would that put me back in excellent range or will it have to wait til my car is paid off in full?


@hifromben, hi! If your aim is to improve your credit score, reducing your balance (below 30% and ideally below 10% of your limits) will have the most immediate impact.

A long and regular history of on-time auto payments are also a key component of a great score, but you’re already doing that. Paying off the car would not help, but a long, on-time payment history will.


des are you saying reducing my card balance ideally below 10% or my whole balance of what I owe including car loan? Also my current score shows as 661 so thats not even in the good zone yet! How long would it take to get to excellent again if I pay down my balances?


Paying down your credit card balance is what matters.

Without seeing your credit report it’s hard to offer a timeline. You are doing the right things. Reduce your credit card balance, pay absolutely everything on time, and watch your credit report for errors.

Derogatory marks are weighted less heavily as time passes, and they eventually drop off altogether. As that happens you want to build as many positives as possible: That means a credit card balance below 30% (or 10% ideally) and a long line of on-time car payments. At some point the good outweighs the bad.

Here’s some great information about what goes into your credit score and how much it matters:

It will happen!


thanks des I get it now I think. Except that article says its important to have different types of credit so maybe I’m thinking about this wrong - like maybe instead of trying to make double paymnts on car thinking it will raise my score to pay it off, I should just let it ride (unintentional pun!) or else I would only have revolving credit of one card. Maybe I should get another card? That might help my “poor” age of accounts but tank my age of accounts right. It’s like i can’t win!


@hifrmoben, don’t overthink it! You can win, it just takes more time than you want it to.

You have a revolving account (credit card) and an installment account (car). I’d get the balance down on the credit card below 10% or pay it off entirely. In an ideal world you want to use it regularly for small purchases and pay it off each month.

But yeah, otherwise let it ride. On time payments and credit usage are big factors that you and only you control. Mix of credit? You got that. Age of accounts? Not so big, and you can’t go back in time.

Time and steady on time payments will heal everything in time. Just not immediately.

And let me underline this: A good credit score does not automatically equal good finances. Do the things that are good for your financial health (pay your bills, save for retirement and emergencies) and a good credit score will usually follow.

The answer is not always more credit. You need enough credit to show anyone who might lend you money that you always pay it back. Your credit “score” is just an estimate of that risk.


@hifrmoben: What Des said. Scoring formulas pay more attention to the balances on your credit cards than the balances on your installment loans. Paying off an installment loan quickly may even ding your scores a bit. @Bev wrote about that recently:

It’s also important to know that carrying balances on your credit cards from month to month doesn’t help your scores, and it’s an expensive habit. It’s just important to use credit cards lightly but regularly, and best to pay them in full every month.

Hope that helps and thanks for all the great questions!


Thank you very much des - this is probably the best finance advice i’ve ever gotten. I’m gonna be more patient and ‘let it ride’! Plus I am inspired to look at saving.


ok Liz well that is good to know that about paying car loans off early!


If you need an action plan, here’s your to-do list. You may have several of these knocked off, but we consider this a path to basic good financial health.

  1. Create a starter emergency fund ($500 to $1,000).
  2. Contribute enough to a workplace retirement plan (if you have one) to get the full company match (if it has one). No plan or no match? Consider contributing 3-5% of your income to an IRA or Roth IRA.
  3. Pay off toxic debt (credit cards, payday loans and other high-rate debt).
  4. Boost retirement savings to at least 15 percent of income.
  5. Build emergency fund to equal at least three months’ worth of expenses.
  6. Tackle other priorities: saving for college or home down payment, paying off other debt

Build a budget and stick to it. I guarantee in a year, two years, five years, you will look back and be amazed at what you have accomplished. Update us every now and then – it does other people in your situation so much good to see someone making progress.


I’m confused by the differences between credit freezes vs lock also @sara! Your question inspired me to look more closely at this.

@ajayakumar wrote about the differences here.

When you freeze your credit at the three credit reporting bureaus — Equifax, Experian and TransUnion — you restrict access to your credit report so most lenders can’t see your information until you unfreeze it. Since a creditor is unlikely to open a new account in your name without checking your credit, that protects you from fraudulent accounts. Unfreezing your report requires the use of a password-protected account or a PIN.

Similarly, when you lock your credit, you restrict most lenders’ access. But you can unlock your credit report immediately at any time, on your computer or mobile device, when you do want to allow access.

Great thread btw - I’m learning tons! :popcorn:


Thanks for addressing @sara’s original question, @cori! I totally missed that.

Locks are something the bureaus promoted to compete with freezes. The bureaus said locks would make it easier to get credit when you wanted it. But freezes are very easy to thaw online, and now they’re free, so the case for locks is less compelling. I was always a little leery of locks anyway, since freezes are governed by federal law and your rights with a lock depend on the bureaus’ fine print.


One thing I have been wondering about is potential landlords checking your credit. I applied for an apt with 2 friends last summer. One friend had fine credit, one had bad credit and I have no credit report or score yet because I am still in school and haven’t used any credit cards yet or tried to get any.

My friend w/ bad credit was denied and had to get her stepdad to co-sign our lease. But me, and friend w/ good credit were accepted w/o cosigner. it seems like no credit would be treated same as bad credit, but I guess that’s not the case? Also will having this lease give me some credit and a score since they did check my credit? How long does it take?


Hi, CF88, and welcome to the NerdWallet community!

You don’t absolutely have to have credit cards to have a credit score. A student loan could help you get a credit profile. That said, credit cards aimed at students can be a good way to establish credit, and/or becoming an authorized user on a relative’s card could help. Rent payments will help if a) they are reported to the credit bureau(s) and b) they are part of the calculation in the score being used. Rent payments are NOT used to calculate the FICO 8, the credit score most often used for lending decisions. The simplest and easiest way to get a credit score are on-time payments on a loan or credit card. You can find some ideas here:
How to build credit

And congratulations for thinking ahead and building credit BEFORE you absolutely need it. You should have a FICO score after about 6 months of reported payments, and a VantageScore much sooner than that.


Thank you for the information!


Thanks for posting this thread. I’m really getting into the community and love the advice, wisdom and guidance.

The question I am going to ask is, how long will it take to see a poor credit score (450-470 range) to at least a fair range(640 or higher)?

Some background on this situation. I had 10 bad debts(credit cards, medical bills, cable/internet bill, etc). I have an excellent credit utilization rating. I have a poor on time payment rating unfortunately, due to a 60 day late payment. I have 1-2 derogatory marks(varies from credit bureaus). And 4 accounts have been closed.

Enough of the discouraging situation. On the positive side of things, I paid off two bad debts. Also too, I’m going to apply for a secured credit card.

I hope this is enough info to help with my question.


It’s REALLY hard to predict that. Paying off debts in collection won’t help your scores, unfortunately, but a secured credit card or two and a credit builder loan definitely can. You can read more here:

BTW, we’re super glad you’re here and asking questions!! It’s important to know that there’s nothing permanent about credit, and that you can improve yours over time. We’re here to help!