13 TikToks That Actually Make Credit Scores Make Sense

    "Let's not shame people with lower credit scores. It's not cute."

    Megan Liscomb
    by Megan Liscomb

    Personal Finance Editor

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    If thinking about your credit scores makes you want to run away from society and start a new life in the woods, you're definitely not alone. Credit can be pretty confusing and difficult to deal with, especially when you're just starting out.

    FOX / Via giphy.com

    But the good news is, once you learn some credit basics, it can make it a little bit easier to build healthy scores. And a higher credit score can help you get approved for a mortgage, pay lower interest rates, and take advantage of credit card rewards.

    To make learning the basics a little more fun, I scoured TikTok to find creators whose videos totally nail the stuff that everyone needs to know about their credit.

    Before we get into these videos, it's important to be aware that there's some not-so-great financial advice floating around on TikTok too. However, the videos I've pulled here are totally solid, and many of the creators I'm featuring also work in the financial industry. In general though, it's always a good idea to take financial advice on social media with a grain of salt and do your own research before making any money moves. 

    1. First things first, this video by @tatianacredit breaks down the difference between your credit reports and your credit scores.

    Did you know that your credit score is not your credit report
    @tatianacredit / Via tiktok.com

    In the video, they explain that your credit report contains information about the way you've handled debt in the past. Meanwhile, your credit scores get calculated based on the information that's on your credit report. It's kinda like your credit report is the test and your scores are your grades.

    @tatianacredit

    & also, credit karma is not showing you your FICO score! #credit #creditrepair #ficoscore

    ♬ Aesthetic - Jimmy Flatting
    "If you are focused on just getting your credit score up point by point, and you're not focusing on the main issue, which is your credit report, you're going to be missing out. And you might not get approved for the things you want to get approved for," the user explained.

    2. And this video by @colormycredit explains that you actually have multiple credit scores.

    @colormycredit / Via tiktok.com

    In response to a user who asked why their Experian and Equifax credit scores are so different, this user explains that there are actually three different credit bureaus (Experian, Equifax, and Transunion) that track information and compile credit reports on what you borrow and how you repay it.

    Creditors don't have to report your information to all three bureaus, so your credit report might look different from one bureau to the next. This means that you'll likely see different scores depending on which credit report your scores are based on. And on top of that, there are also multiple credit scoring models that might be used to calculate your score, so you can also have different scores based on the same credit report. Finally, your scores change fairly often depending on the latest information that's been added to your credit report.

    3. Speaking of multiple credit scores, this video by @stevejohnsonloanofficer illustrates a pretty common misconception about the scores people see on Credit Karma.

    @stevejohnsonloanofficer / Via tiktok.com

    In the video, the user pulls a credit report for a client who saw their score on Credit Karma listed at 725. However, their FICO score, which is the credit score that gets pulled in most major lending decisions in the US turned out to be much lower, at 620. So what's up with that?

    @stevejohnsonloanofficer

    Beware of Credit Karma and their vantage score vs a FICO score that lenders pull #mortgage #mortgagetips #credit #fyp #realestate

    ♬ original sound - Sad audios 🖤
    The credit scores that you see on Credit Karma and many other financial websites are calculated using the VantageScore model. They're real scores based on your credit report, so they can be educational to look at. However, when you actually apply for a loan or credit, it's far more likely that the lender will look at your FICO credit score. Wanna see your FICO score and find out what a lender will see? You can make an account with Experian to check out your FICO score and keep tabs on your credit report. It just takes a couple minutes to get it set up and it's totally free.

    4. Wondering how your credit scores get calculated? This video by @savelivethrive breaks down the five factors that go into calculating your FICO credit score.

    Five factors go into calculating your FICO score: payment history, credit utilization, length of credit history, credit mix, and new credit.

    Credit history, which looks at your record of on-time payments, counts for the biggest chunk of your FICO, at 35% of your score. So if you can pay your loans and credit card bills on time every time, that will have the biggest impact on your scores.

    Next credit utilization makes up 30% of your score. This factor looks at how much of your available credit you're using** **and it's expressed as a percentage. For example, if you have a $1,000 credit limit and a balance of $100 on your credit card, then you're using 10% of your available credit. Generally, experts recommend trying to keep your utilization under 30% if you're trying to get a credit score in the "good" range, and below 10% if you want exceptional credit.

    Then the length of your credit history counts for 15% of your score. The longer you've had accounts open, the more trustworthy your credit report appears to lenders. And finally your credit mix and new credit inquiries each make up 10% of your score. Credit mix looks at what different types of credit you have, like a credit card, student loan, and personal loan. More types of credit can help this factor, but it makes up a small percentage of your score, so don't feel like you have to get a loan to fill out your credit mix. New credit inquiries (aka hard inquiries) happen when you apply for a loan or credit and a financial institution checks your credit file.

    5. And this video from @humphreytalks perfectly answers the question: Does checking your credit scores hurt your credit?

    @humphreytalks / Via tiktok.com

    The TikTok explains that you can check your own credit scores all you want without losing a single point because that's just looked at as a "soft inquiry". However, when a financial institution checks your credit scores, that's called a "hard inquiry."

    @humphreytalks

    Does checking your credit score affect it!? Hard vs Soft Inquiries. #learnontiktok #tiktokpartner #credit

    ♬ original sound - Humphrey Yang
    One hard inquiry won't damage your scores, but if you apply for several new credit cards or loans in a short period of time, your scores will start to slip.

    6. Ever wonder how your credit scores look to a bank or creditor? This TikTok from @carolynebeaulne breaks down the FICO credit score ranges from exceptional to poor.

    The lower the score, the borrower is seen as a higher risk for the bank
    @carolynebeaulne / Via tiktok.com

    When you apply for a loan or a credit card, a financial institution will pull your credit scores to help them decide if they want to lend you money or not. As this TikTok shows, your credit scores are ranked into ranges, from exceptional to very poor, which institutions may take into account when they're making lending decisions.

    Institutions see people with lower scores as riskier borrowers, so they might deny them loans or credit based on their scores. Or, if they do get approved, they will likely have to pay much higher interest rates than people with higher scores. So if you ever plan on borrowing money to buy a car or house, working on your credit now can help you save money later.

    7. If you've never had a credit card or a loan (or haven't used credit in several years), there might not be enough information on your credit report to generate scores. Luckily, this video by @shondamartin_ has some great advice for building your credit from scratch.

    Hi, I'm new to your page and was curious on what to do if I have no credit established at all?
    @shondamartin_ / Via tiktok.com

    First, the user recommends getting a secured credit card. These cards are designed for people with low or nonexistent credit scores who want to build positive credit history.

    To open a secured credit card, you'll need to make a deposit first, which then becomes your credit limit. Use your secured card responsibly and pay your bill on time each month, and this will help you build a positive payment history.

    Next, they suggest applying for a credit-building installment loan through Self or a local credit union. These types of loans allow you to essentially make payments to your future self, which get reported to the credit bureaus, and at the end of the loan term you have access to the money you paid in. Within a few months, the positive payment history from these two types of credit should show up on your credit report and give enough information to give you a credit score.

    And by the way, if you have lower credit scores, you can also take advantage of secured credit cards and credit builder loans to get your scores up.

    8. And this video by @ksmithcredit busts the myth that you need to be in debt to get a healthy credit score.

    @ksmithcredit / Via tiktok.com

    In this video, the user explains that you can maintain a high credit score without carrying any debt by using a couple of credit cards and paying them off in full each month.

    @ksmithcredit

    Send this to someone scared of credit🙂 I know someone needs to hear this! #credittok #credit #creditcard #debt #daveramsey

    ♬ original sound - Credit Solutions Professional
    If you're trying to build credit fast, it can make sense to take on a loan in addition to credit cards to improve your credit mix and add more payment history in a short amount of time. However, if you're just trying to get in good financial shape and time's not an issue, all it takes is making regular, on-time credit card payments. Plus, when you pay your credit card off in full each month, you can take advantage of rewards and perks like airline miles and cash back without paying a penny in interest.

    9. Why does paying off a loan sometimes hurt your credit score? In this video, @thetrustedbanker explains it all.

    @thetrustedbanker / Via tiktok.com

    Right off the bat, the user reminds us that, "Credit is not about score," it's about what's on your credit report. And when you pay off a loan, that loan no longer shows up as active on your credit report. 

    When you close a loan account, your score might dip because you no longer have that loan and its payment history active on your credit report. It's also no longer included in your credit mix, and if it was a loan you were paying for a long time, like a student loan, it might also affect the age of your credit. BTW, the same thing happens when you close a credit card, which is why it's often a good idea to keep older cards open.

    Worried about the dip in your credit when you close a loan? You can always take out another loan or open a credit card, or just keep making regular, on-time payments on any other credit that you have. Just stay focused on adding positive information to your credit report and your scores should trend upward.

    10. This video by @zacharyburrabel covers how your credit utilization affects your scores *and* what you can do about it to gain more points.

    @zacharyburrabel / Via tiktok.com

    Aside from making regular, on-time payments on all of your credit cards and loans, keeping your credit utilization low is one of the best things you can do to raise your credit scores. 

    One way to lower your utilization is by paying off debt (perhaps these practical credit card debt tips that real people swear by can provide some ideas). The user recommends paying at least 95% of your balance before your billing cycle closes. Or, a sneakier way to raise your utilization could be by adding another credit card or asking to raise your credit limit (just don't use it as an excuse to spend more). This increases your available credit, which in turn shrinks your utilization percentage.

    11. What if you accidentally miss a payment? Well, this video by @themoneyplug.co reveals that you can actually request to have a late payment taken off your credit report.

    @proactivebusybody / Via tiktok.com, @themoneyplug.co / Via tiktok.com

    Yes, it's really true. The user explains that if you miss a loan or credit card payment and you're usually on time, you can send the company a letter explaining the situation and asking them to remove the negative marks from your credit report.

    @themoneyplug.co

    #stitch with @proactivebusybody | Late Payment Removal process‼️I hope this helps 🙂 #credittok #creditrepair #goodcredit

    ♬ SUNNY DAY - Matteo Rossanese
    It's called a goodwill letter. The creditor doesn't have to honor your request, but it can't hurt you at all to ask.

    By the way, you should also know about the law this user mentioned, the Fair Credit Reporting Act. Under this law, you have the right to get one free credit report from all three bureaus every year. You also have the right to dispute inaccurate information that appears on your credit reports and to get outdated information removed. So it's a great idea to look at your credit reports from all three bureaus at least once a year to check for inaccurate accounts or errors. The last thing you want is for a lender to see a lower score than you deserve due to a reporting mistake.

    12. And this video by @tatianacredit talks about why it's so important to build a healthy credit score in the first place.

    @tatianacredit / Via tiktok.com

    In the video, the user shares that they were looking at apartments in Chicago. There was another woman looking at the same apartment who really wanted the place and could afford it, but because her credit scores were low, she couldn't get approved.

    @tatianacredit

    All the apartments I applied to required a 670 credit score 🙃 #apartmenthunting #chicago #creditreport #ficoscore

    ♬ Emotional (Instrumental) - BLVKSHP
    Your credit doesn't just get pulled when you need to borrow money — landlords will look at your credit when you apply for an apartment, and in some fields, employers can check your credit before hiring you for a job. So taking care of your credit and keeping it healthy can help you do so much more than just getting a loan.

    13. Finally, this TikTok by @quenwilliamss explains that a lower credit score is nothing to be ashamed of.

    Person looking at the camera
    @quenwilliamss / Via tiktok.com

    In response to a user who asked, "Who has a credit score below 620?" this creator responded by sharing their past low score and explaining the very understandable reasons behind it.

    "At one point, I had a score of 560," the creator revealed, and went on to share that they grew up in a household that didn't have much money and that they didn't learn about credit scores or financial literacy. They lived paycheck to paycheck as a young adult, sometimes relying on credit cards just to survive. Our credit system is obviously confusing and far from perfect, and it can be especially hard to get a higher credit score if you're getting charged high interest rates while trying to live on a lower income. "So let's not shame people with lower credit scores. It's not cute."

    And if your scores are on the lower end right now, just know that they aren't set in stone. It'll take time, but learning more about credit is a great first step to building a better score.

    Have you found any great money tips on TikTok? Tell us about them in the comments below.

    And for the latest money hacks and ideas, check out the rest of our personal finance posts.