📊 Understanding Credit Scores
Your credit score is a number (typically 300-850) that shows how trustworthy you are with borrowed money. Lenders use it to decide if they'll give you loans, credit cards, or mortgages. A good credit score (670+) can save you thousands in interest over your lifetime!
- •Payment history (35%): Paying bills on time is crucial
- •Credit utilization (30%): Keep balances low relative to limits
- •Length of credit history (15%): Older accounts help your score
- •Credit mix (10%): Having different types of credit helps
- •New credit (10%): Too many new accounts can hurt
🚀 Building Good Credit
Start with a secured credit card or become an authorized user on a parent's account. Always pay your balance in full each month, never miss payments, and keep your credit utilization below 30%. Check your credit report annually for free at AnnualCreditReport.com.
- •Start early - building credit takes time
- •Pay on time, every time - set up autopay if needed
- •Keep old accounts open to build credit history
- •Monitor your credit regularly for errors or fraud