A credit score is a number that rates your financial reliability. It is calculated by taking into account different aspects of your finances including how much you owe, how long you have had credit exposure and the type of debt you carry. The range for a FICO Score ranges from 300 to 850 with higher scores indicating better creditworthiness.
How Credit Scores Work?
We all know how important a credit score is. Whether you're applying for a car loan or looking for your first apartment, lenders and landlords want to see that you have good credit. But what exactly is it?
A FICO® Score is the most common way of measuring someone's creditworthiness. It was created by the Fair Isaac Corporation in 1989, and it ranges from 300-850; the higher the number, the better your chances are of getting approved for loans or renting an apartment.
There are 3 major factors that affect your FICO Score:
Payment history (35%),
Amounts owed (30%),
Length of time since last delinquency (15%)
Payment history includes anything related to paying bills on time—whether it.
Credit Score Factors: How Your Score Is Calculated?
The credit score is an important indicator of financial responsibility that lenders use to determine whether or not they will give you a loan. Before taking out a mortgage, applying for a car loan, or even getting your first credit card, it's crucial to know what your credit score is and the factors that affect it.
How to Improve Your Credit Score?
There are many ways to improve your credit score, but the best way is by avoiding these 6 mistakes.
Mistake #1: Closing Credit Accounts
Mistake #2: Paying Late or Paying Less than the Minimum Payment Due
Mistake #3: Not Checking Your Credit Report At Least Once A Year
Mistake#4: Losing Track of Your Account Balances and Payments
Mistake#5: Having Too Many Open Accounts That Remain Unpaid for a Long Time Period
Mistake#6: Applying For Multiple Loans, Lines of Credit or New Cards In A Short Amount Of Time
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