Understanding Your Credit Score: What It Is and Why It Matters

Your credit score is a three-digit number that represents your creditworthiness. It affects everything from loan approvals to apartment rentals.

What Makes Up Your Score

FICO Score Components:

1. Payment History (35%) - Do you pay on time?
2. Credit Utilization (30%) - How much of your available credit are you using?
3. Length of Credit History (15%) - How long have you had credit?
4. Credit Mix (10%) - Do you have different types of credit?
5. New Credit (10%) - Have you opened many new accounts recently?

Score Ranges

• 800-850: Exceptional
• 740-799: Very Good
• 670-739: Good
• 580-669: Fair
• 300-579: Poor

How to Improve Your Score

1. Pay bills on time - Set up autopay
2. Keep utilization low - Aim for under 30%, ideally under 10%
3. Don't close old accounts - Length of history matters
4. Limit new applications - Each one causes a small, temporary dip
5. Check for errors - Dispute any inaccuracies

Monitoring Your Credit

You're entitled to free credit reports from each major bureau annually. Check regularly to catch fraud early and track your progress.