Everything You Need to Know About Credit Scores
Your credit score and credit history can impact the price of your bills, approval for loans, and securing your dream home, just to name a few. This can be intimidating, especially for those who have recently established a score. But if you know why your score is important, when you should check your score, and how to maintain a good score, you’re ahead of the game!
Why it’s important to check your credit score
It’s crucial to check your score for many reasons. First of all, there may be errors in your credit report. Additionally, your credit score impacts your approval for loans, insurance rates, and employers may even check your score when you apply for jobs. Here’s what makes up your credit score, according to myFICO:
- 35% — payment history
- 30% — how much you owe
- 15% — the length of your credit history
- 10% — credit mix (different types of loans)
- 10% — new credit
When should you check your credit score?
We recommend that you check your score at least three times per year to make sure there are no errors in your report. After all, there always seems to be a new scam or breach in the news, so you’re better safe than sorry. If there are errors on your report, it’s best to report them as soon as possible. A great way to check your credit score is through Credit Karma, a mobile app and website that provides easy access to, and information about, credit scores. Learn more about free credit report websites and the benefit they provide to consumers.
If you have found errors on your credit report, you can make a credit report dispute on one of these trusted websites:
How to maintain a good credit score
Credit scores can range from 300-850, and Bankers Trust typically considers a good credit score to be over 700 and a bad credit score to be below 600. You can improve your credit score or maintain an already high credit score by doing the following:
- Pay your bills on time
- Pay off debt to eliminate revolving credit
- Keep balances low on credit cards
Once you’ve reached a good credit score – or one in your desired range – it’s important to stick to these habits to maintain your score. If your score is below where you’d like, learn other ways to improve your credit score.