25 Bizarre Things About Credit Scores You Probably Don't Know

Credit scores affect your financial life in many ways — here are 25 weird facts about credit scores that could help you understand your credit.
Updated April 11, 2024
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Credit. Love it or hate it; it’s part of your financial life. Your credit score can affect whether you get approved for a home loan, a credit card, and in some cases, hired for a job. But just how did the credit score come to be? And why is it so important to your financial life?

Whether you’re just starting your journey to boost your credit, or you’ve spent some time making moves to improve your finances, it’s useful to know how the credit scoring system came to be and how credit scores work. Here are 25 weird (and useful) facts about credit scores to help boost your knowledge.

25 weird facts about credit scores

Early credit reports were subjective

Unfortunate but true, early credit scores were very subjective. In the 1800s, when the idea of credit first appeared, it was mostly used by businesses. As transactions grew, lenders needed a way to systematize and standardize their lending to consumers. As it turns out, the system proved to be far too subjective and opinionated, leaning heavily on gender, race, and class biases. Eventually, it was replaced by an alphanumeric system instead.

Privacy advocates were opposed to early credit reporting

Consumer credit reporting — and the information it revealed — was met with heavy criticism by privacy advocates during the 1960s. Alan Westin, a leading privacy advocate of the time, conducted an experiment to see how easy it was to access information about another citizen’s credit. Through the process of the experiment, he found that not only was it possible to get someone else’s credit history, but it was also easy.

Equifax (originally called Retail Credit Company) collected some very personal data for early credit reporting

These days, Equifax is a common household name when referring to credit scoring and reports. But it didn’t start out that way.

Originally, Equifax was called — you guessed it — the Retail Credit Company. It collected all types of information on Americans, from simple capital and credit to data on their sexual, political, and marital lives. It even made judgments of character in its reports, and its information was rife with bias.

Talk of computerizing credit histories helped spur the Fair Credit Reporting Act

After the Retail Credit Company announced its plans to computerize records, a congressional hearing was called, and the Fair Credit Reporting Act was enacted. It was one of the most important pieces of legislation at the time and forced credit bureaus to publicize their data.

They were also required to remove the data they collected on race, sexuality, and disability, and were required to remove negative information after a certain period of time. These hearings are widely regarded as the impetus for the company’s name change, as a way to clean up its image.

Credit scoring algorithms were a thing well before the credit score as we know it

Yep, you read that right. Long before the age of algorithms from big tech companies like Facebook and Google, credit reporting agencies were using algorithms to give credit scores to U.S. citizens.

As demand for credit products grew among the three big agencies — Equifax, Transunion, and Experian — the difficulty of interpreting the reports they created and comparing them against each other became more apparent. The agencies partnered with tech firm Fair, Isaac, and Company (known today as FICO®) to standardize the credit scoring algorithm.

Credit scores as we know them were introduced in 1989

The credit score as we know it today is more than 25 years old. But before 1989, there wasn’t an unbiased structure for evaluating people’s credit fairly. Thus, many people were often denied credit by a system that was inconsistent and unfair.

Fair, Isaac, and Company — now known as FICO® — began standardizing the algorithm for scoring people’s credit in the late ’80s in an effort to replace these biases with fairness. The system has remained mostly unchanged since the overhaul.

Credit scoring models vary from country to country

It’s a common misconception that the U.S. is the only country with a credit system. Although our specific system of credit scores may be unique to us, other countries have ways of determining creditworthiness too.

Some credit systems are similar to the U.S., such as Canada and the U.K. But some are different. Japan, for example, places emphasis and length of employment and annual salary. Germany has something called a SCHUFA score, starting with a score of 100 and moving down as financial history grows.

Five major factors determine your credit score (in the U.S.)

What factors determine your credit score? There are five major factors to pay attention to:

1. Payment history: This is the most important factor, and it affects 35% of your score.

2. Credit utilization: This is how much credit you’re using at a given time, and it accounts for 30% of your score.

3. Credit history length: This is how long you’ve had credit accounts, and it is responsible for 15% of your score

4. Credit mix: This is how many types of credit you’re using, and it accounts for 10% of your score.

5. New credit: This is how many recent accounts you’ve opened. It accounts for 10% as well.

Your credit score in the U.S. may not matter abroad

Good news, bad news. Whether you have a great credit score, an average credit score, or a not-so-great credit score in the U.S. probably won’t matter when you travel to another country. Although many countries have their own methods for determining creditworthiness, they generally don’t have the capability to track down your credit score from the U.S.

Some jobs may require a higher credit score than others

A background check for a job is normal. But what about a potential employer checking out your social profiles? And how about checking your credit? Some employers will search your credit score when you’re applying for a job, especially for roles in which you’ll be handling sensitive information. These roles might include military jobs, accountants and financial partners, lawyers, law enforcement and government roles, prison workers, and even casino jobs.

Potential employers can reject your application based on your credit report

It sounds crazy, but it’s possible a potential employer could reject your job application based on your credit report. Let’s say you get all the way through the hiring process after four tedious rounds of interviews. You’ve met everyone on the team, and you’ve all but been promised the role. But because you're getting paid a high salary and the role has more responsibility than you’ve carried before, the old-school hiring manager decides to check your credit report (it’s legal in 39 states and Washington, D.C.).

Your credit report turns up poor with late accounts, and the manager decides to go with someone else, believing your credit report is an indication of how you’ll perform your job. All the more reason to check your report frequently and take steps to raise your score.

Your credit score may predict the success of your relationship

You know your credit score affects your ability to get a credit card or home loan, but did you know that it could determine your relationship’s success? It sounds crazy, but it’s true.

Researchers Jane Dokko, Jessica Hayes, and Geng Li found that a higher credit score has implications for your relationship’s long-term success. Those with higher credit scores typically stayed together longer or had greater odds of getting into a relationship the following year.

Approximately 26 million Americans don’t have a credit score

If you don’t have a credit score or credit history, you’re not alone. Roughly 26 million Americans don’t have enough credit history to generate a score, according to a 2015 report released by the Consumer Financial Protection Bureau.

Not having a credit score or credit history makes it difficult to hit your financial goals. Whether it’s getting a new car, being approved for a credit card, or buying a home, if you don’t start building credit now, you’ll have a hard time reaching your goals. Luckily, there are tools like Experian Boost that can help you take control of your credit score, start building a credit history, and improve your finances.

You might have credit reports even if you don’t have a credit score

Even if you don’t have a credit score, you might still have credit reports in your name. This is possible because credit scores are generated based on only the past two years of data. If you haven’t had a credit account open within the last two years, you may have a report but no score.

This isn’t ideal, as you want your credit history to work for you — not against you — and not having a score makes it difficult to get approved for new credit.

Late payments typically only appear on your credit report after 30 days

Late payments are a huge deal for your credit score. Even one late or missed payment can negatively affect you, as payment history accounts for 35% of your score.

If you’re behind on your credit bills and hoping for a grace period, there’s good news. Most late payments aren’t reported for 30 days. If you make your missed payment before that 30 days is up, there’s a chance the creditor won’t report it to the credit bureaus as a late payment. Learning better ways in how to manage your money and only taking on credit you can reasonably pay for can help you avoid late payments.

Increasing your credit limit may boost your credit score

There are lots of ways to improve your credit score, from using a service like Experian Boost to paying down your loans. One way that’s often overlooked for improving your credit score is increasing your credit limit. When you increase your credit limit, it can lower your credit utilization, which has a big impact on your score.

For instance, if you’re using $5,000 of a $10,000 credit limit, that’s 50% utilization — 20% higher than the recommended amount. But if you increase that limit to $20,000, you’re using only 25% of your credit limit, putting your credit utilization under 30%, which is much better for your score. Just keep in mind that if your creditor runs a hard credit check before increasing your limit, you may see your score dip by a few points temporarily.

Applying for a new credit card may help your credit score

In a similar fashion to increasing your credit limit, applying for a new credit card may help improve your credit score — assuming you don’t increase your card balances as well. When you add a new credit card to your lineup, your credit utilization decreases, your on-time payment history increases, and in some cases, your credit mix can see a boost too.

Another option? Balance transfer cards. Balance transfer cards help you move high-interest accounts to low-interest accounts and may help you improve your credit score over time. Deferring interest payments during a 0% introductory period can allow you to pay down more of your debt faster.

Credit reports are not the same as credit scores

Although it may seem like they’re the same thing, credit scores and credit reports differ from one another in a few ways. You can think of your credit reports as a list of your different credit lines and history of payments. However, those reports don’t include your score — the three major credit agencies take the information found in your credit report and generate a score based on that information.

Negative items on your credit eventually come off your report

If you’ve ever made a late payment, had an account go into collections, or have more than a few hard credit inquiries driving your score down, don’t lose hope. Your credit score may eventually recover.

Negative items on your credit report usually remain on file for seven years. The longest negative item is bankruptcy, which can stay on your file for up to ten years, depending on which type of bankruptcy you file. By contrast, hard inquiries on your report only remain there for up to two years.

90% of lenders use the FICO® score to make decisions

The FICO® score is the gold standard for credit scoring, and more than 90% of U.S. lenders use it when making decisions about creditworthiness. The FICO® scoring system is regarded as fair, free from bias, and comprehensive. The system has been in use for more than 30 years and has a track record of accurately predicting the risk of a credit decision.

Having multiple credit scores is normal

Have you ever applied for a car loan, and when the dealer pulled your numbers, you found that you had not just one but multiple different scores? As you start trying to raise your credit score, you’ll find that multiple credit scores are a common occurrence. This is because there are a few different credit scoring models, each with its own unique way of interpreting credit information. Bottom line? Don’t worry about the discrepancies, and just focus on improving your score.

Consumers in the U.S. have an average of 4 credit cards

Although four credit cards might seem like a lot, it’s not that crazy. If you’re trying to improve your credit, however, you may want to consider going beyond just credit cards. A healthy mix of different types of credit accounts — including credit cards, loans, and even cars can actually improve your credit score. The key is to have a good mix of different types of credit and to always pay your credit bills on time.

There are multiple credit score ranges

There are three major credit reporting agencies that you may have heard of: Transunion, Experian, and Equifax. Transunion’s range is 300 to 850, Experian’s is 300 to 850, and Equifax’s is 280 to 850. There’s also the newer VantageScore, which ranges from 300 to 850.

What’s the highest credit score? Typically, 300 to 579 is considered poor, 580 to 669 is fair, 670 to 739 is good, 740 to 799 is very good, and 800+ is excellent. If you’re not where you want to be yet, that’s OK. Working to improve your credit score is a worthwhile investment and isn’t as difficult as you might think with Experian Boost.

Your credit score can help you save thousands of dollars

Having a good credit score is important for getting approved for things such as new credit cards, car loans, and mortgages. But did you know that your credit score can also affect the quality of the loan terms you receive? It’s true. When your credit score is lower, it usually correlates to a higher interest rate. Over many years, a higher interest rate can add up to thousands of dollars. If you take the time now to raise your credit score, you could save a ton of money in the long run.

Checking your score doesn’t hurt your credit

There’s a common misconception that checking your credit report will harm your score. This is only partially true, and it refers to hard inquiries by a creditor when you apply for something like a home or car loan. Even then, a hard inquiry only knocks your score down by a few points and is typically a requirement to meet some of your goals. On the other hand, soft inquiries, which typically occur when you check your own credit or as part of a pre-employment background check, do not impact your score.

The bottom line

Although there are several weird facts out there about credit scores and their history, these numbers paint an important picture of your financial health. Working to improve your credit score over time may give you advantages like better interest rates and terms when you apply for lines of credit. Doing so is a worthwhile investment that can pay dividends over time.

Experian Boost Benefits

  • Get credit for making on-time payments for your qualifying rent, utility bills, and streaming services2
  • 100% free — no credit card required
  • New credit scores take effect immediately
  • FICO® Score refreshed every 30 days upon sign in and one free personal privacy scan

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