What is a Credit Score?

Your credit score is a three-digit number that represents your creditworthiness to lenders. It typically ranges from 300 to 850, with higher scores indicating better credit health.

How Credit Scores Are Calculated

Credit scores are calculated based on several key factors:

  • Payment History (35%) - Your track record of making payments on time
  • Credit Utilization (30%) - How much of your available credit you are using
  • Length of Credit History (15%) - How long you have been using credit
  • Credit Mix (10%) - The variety of credit accounts you have
  • New Credit (10%) - Recent credit inquiries and new accounts

Improving Your Credit Score

Here are proven strategies to boost your credit score:

  1. Pay all bills on time, every time
  2. Keep credit card balances low
  3. Do not close old credit cards
  4. Only apply for credit when necessary
  5. Monitor your credit report regularly

Credit Score Ranges

Understanding credit score ranges helps you know where you stand:

  • Excellent (800-850): Best rates and terms
  • Very Good (740-799): Good rates and terms
  • Good (670-739): Fair rates and terms
  • Fair (580-669): Higher rates, stricter terms
  • Poor (300-579): Difficulty getting approved