Understanding Credit Scores
What is a Credit Score?
A credit score is a number that shows how likely you are to pay back money you borrow. It’s usually a three-digit number between 300 and 850. A higher score means you’re less risky to loan money to. Lots of things go into your credit score, like how you’ve paid your bills, how much credit you use, and how long you’ve had credit.
Factors that Impact Credit Scores
Lots of stuff can change your credit score. The main things are how you’ve paid your bills and how much of your credit you’re using. Your credit history, new credit, and the types of credit you have also play a part.
Importance of a Good Credit Score
A good credit score can help you get better deals on loans and other stuff, like rental places or jobs. It gives you more choices and better financial options.
Improving and Maintaining a Good Credit Score
If you want to make your credit score better, you can pay your bills on time and not use all your credit. It’s also smart not to close old accounts and to be careful about opening new ones. Checking your credit report for mistakes and fixing them can also help keep your score high.
Impact of COVID-19 on Credit Scores
COVID-19 has affected the money situation for a lot of people. Some folks are having trouble paying their bills, which can hurt their credit scores. Knowing about programs like forbearance can help you deal with the effect of the pandemic on your credit score. Uncover new perspectives on the subject with this specially selected external resource to add value to your reading, Examine this valuable content.
Financial Literacy and Credit Scores
Learning about how money works is important. Knowing about credit scores helps you make good choices about your money and borrowing. Learning about your money can give you power to make good financial choices.
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