Wealthy Living

What Is a Good Credit Score and Why It Is Essential to You

Credit scores can have a profound impact on our finances. For example, a good credit score could mean better terms on your loan.

When we talk about credit scores, there are typically two significant players, FICO and VantageScore. Each uses similar factors to determine your credit score within their system.

But, what is a credit score, and what is a good credit score to have? Let’s go through all the in’s and out’s of credit and how it can affect your finances.

What is a Credit Score?

Let’s start by first defining what a credit score is. Essentially, a credit score is a number ranging from 300 to 850 to help lenders determine the likelihood that you’ll pay your loan back to them.

Lenders will consider your score when applying for a credit card, mortgage, auto loan, or even by a landlord when you are looking to rent a property.

What Factors Impact Your Credit Score?

Many factors can impact your credit score. Some more than others, but each aspect is just a piece of the puzzle when lenders look at the risk level associated with lending you their money.

Some common factors when determining your credit are:

Keeping up with all bills, including credit cards, utility bills, cell phone bills, mortgages, and any other bills you might have, will boost your score significantly.

Paying Your Bills

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