Get to Know Your Credit Score
Your credit health plays a big role in your financial future. Learn how your credit score is calculated and why it matters:
Check out our Complete Guide to Understanding and Improving Your Credit Score to learn everything you need to know about building better credit.
Video Transcript
You should know your credit score, because it matters. Lenders and businesses use your score to determine whether or not you're a safe investment. And we're not just talking financial institutions here. Your credit score can affect whether you can be trusted as a tenant or even a cell phone user. The higher your score, the lower your interest rates, the more money you can save.
The lower your score, the less likely you are to get credit with great rates to achieve what you want, consolidate your high-interest credit card debt, or buy a great house. Your score, good or bad, can totally impact all of your opportunities.
So how is your credit score calculated? It starts with you. Credit bureaus collect your data from such things as car loans, mortgages, credit cards, and utilities.
Data like, did you pay on time? How much is left to pay off? How long has this account been open? The credit bureaus then create your report with this information. Then scoring agencies calculate the data into your credit score. So your credit score matters. And paying attention to five key factors will help you improve your score.
5 Factors that Impact Your Score: Payment History; Credit Utilization; Credit Account Ages; Credit Mix; Credit Inquiries.
History of on time payments, healthy credit utilization, age of your credit accounts, diverse credit mix showing you manage different types of accounts, and credit inquiries from opening new accounts like credit cards and cell phones. And that brings us back to you. Tell the credit story you want told about yourself by owning your own credit health so you can live your life the way you want to live it.
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