Credit Scores

What’s the key to your future? College degree? Dream job? Lottery jackpot? No, actually it’s your credit score.

Your score can determine what interest rate you’ll pay when you borrow money for a home or car, and the rate you’re offered when you apply for a credit card. Your credit score can also be used to determine whether you qualify for certain loan programs. It can even play a role in whether you’re hired for a job.

Simply put, your credit score paints a picture of your potential value – or risk – to a prospective lender or employer. If you have a good credit score, the picture says you’re honest and reliable, and you pay your bills on time. You don’t spend more than you earn, and you manage your money well.

However, if you have a bad credit score, it suggests that you might not be a good risk as a borrower or an employee. Things that lead to lower credit scores include missed or late payments, a ratio of debt to total available credit on credit cards that’s higher than 30%, outstanding balances on too many credit cards, and frequently applying for new cards.

If you have a good score, that’s great – you’re practicing “financial adulting.” But if your score needs work, there are some things you can do to become MoneyWise. First, get your credit reports and see whether they’re accurate. How to Get Your Credit Score. Dispute any info that isn’t. 10 Easy Ways to Fight Fraud Figure out why you’re late on payments or missing them. Is it simple forgetfulness, or do you have cash flow problems? Are you spending more than you earn? If so, what can you give up or cut back on? And don’t hesitate to call your creditors; most will work with you so everyone wins, and your score improves.

FICO<sup>®</sup> Score ranges

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