September 9, 2024
Still not familiar with this number? Afraid to look even? Your credit score determines not only what kind of credit cards you’ll get approved but also how expensive your mortgage and car loan would be.
Your credit score is like a report card for how well you handle money. It’s a number that tells banks and other lenders if they can trust you with their money. Just like you want good grades in school, you want a good credit score when you’re an adult.
Why Your Credit Score Matters
1. Getting a Credit Card: A good score helps you get better credit cards with cool rewards.
2. Buying a House: It affects how much interest you’ll pay on a mortgage (that’s a big loan for buying a house).
3. Getting a Car: It determines if you can get a loan for a car and how much it will cost.
4. Renting a Home: Some landlords check your credit score before letting you rent.
How Credit Scores Work
Credit scores usually range from 300 to 850. The higher your score, the better! Here’s a simple breakdown:
– 750 or higher: Excellent
– 700-749: Good
– 650-699: Fair
– 600-649: Poor
– Below 600: Bad
How to Improve Your Credit Score
1. Pay Your Bills on Time: This is super important! Set reminders if you need to.
2. Don’t Use All Your Credit: Try to use less than 30% of your credit limit.
3. Keep Old Accounts Open: The longer your credit history, the better.
4. Don’t Apply for Too Many New Cards: Each application can lower your score a little.
Frequently Asked Questions (FAQ)
Q: How often does my credit score change?
A: Your credit score can change every month as new information is reported.
Q: Can I check my own credit score?
A: Yes! You can check it for free once a year from each of the three main credit bureaus.
Q: Will checking my own score hurt it?
A: No, checking your own score is called a “soft inquiry” and doesn’t affect your score.
Q: How long does negative information stay on my credit report?**
A: Most negative items stay for 7 years, but some bankruptcies can stay for 10 years.
Resources to Learn More
1. AnnualCreditReport.com https://www.annualcreditreport.com – Get your free credit report here.
2. MyFICO https://www.myfico.com – Learn more about FICO scores.
3. Consumer Financial Protection Bureau https://www.consumerfinance.gov – Government site with helpful info.
4. [PersonalOne Credit Tools](https://www.personalone.com/credit-tools) – Our own tools to help you understand and improve your credit.
Remember, your credit score is important, but it’s not everything. By understanding how it works and making smart choices, you can improve your score over time. If you have more questions, don’t hesitate to ask a PersonalOne advisor!
