Despite how important they are, most people are confused by their credit scores. That’s right, you have more than one. Let’s explore why a consumer has multiple credit scores, take a look at how they are calculated, and explain how to maintain a good one.
One of the five factors that determine your credit score is the types of credit accounts you have. Having a healthy credit mix, or a variety of accounts in your portfolio, is going to help out your rating.
Not sure what to give your older child this holiday season? Consider the gift of credit. If your child is at least a junior in high school, now may be a good time to teach them about borrowing and responsibly paying back money.
Many people do not know that your credit report and credit score are two separate things. Here is a rundown of each of the two so you can have a better understanding of your credit.
Since each credit provider decides the acceptable level of risk they’re willing to take, it’s really hard to say what a “bad” or “good” credit score is. Despite this fact, there are generally accepted score levels within an overall credit scoring range that can be called “excellent”, “good”, “fair”, “poor” and “bad”.
Even if you know that you have a credit rating, and that the number associated with this score is important, do you know where this number comes from? While there are different scoring models (with FICO being the most popular), all credit scores are based on the information contained in your credit reports.
If you’re surprised by your FICO score, you’re not alone. Your score is determined by a few contributing factors, and each one is weighted differently in terms of how much it affects your total credit rating. Basically, there are 5 different components to consider.