Specifics of your credit score
What makes up 35% of your credit score?
Payment History
How does good credit impact your interest rates on loans?
It will make it so you have lower interest rates
How does bad credit impact your interest rates on loans?
It can make it so you have a higher interest rates
How many times each year can you check your credit score/report for free?
1 time from each of the 3 credit reporting agencies
What makes up 30% of your credit score?
Amounts Owed
How can you build good credit from a young age?
Get a credit card to pay for small bills and keep your utilization low, make your payments on time, and take out a small loan you can realistically pay back quickly
What are a few things that can negatively impact your credit score?
Late or missed payments, short credit history, high credit utilization
How can you check your credit score/report?
What makes up 15% of your credit score?
Length of Credit History
What are a few things that positively impact your credit score?
Build a credit file, make payments on time, pay back debts, and overall responsible credit behavior
What does having a thin file mean?
Having a short credit history
What is your credit utilization rate?
This is a percentage that is calculated using your total credit limit divided by the amount of credit they are actually using
What are the two things that each make up 10% of your credit score?
New Credit and Types of Credit
Why is it important to build a credit history from a young age?
So you can build up a credit file and increase your credit score, which will impact many aspects of your life in the future
What are the consequences of having a thin file?
With a short credit history you do not have a base to build off of, you credit score will be low making it more difficult to get credit and loans
What is the optimum Credit Utilization Rate?
10-15%
What is considered a good, average, and bad credit score?
Good/Great:680+
Average: 620-670
Bad:580-below
When is borrowing a good idea?
When you are in a place to pay it back on time and have a low interest rate
Why is it bad to have a high credit utilization rate?
The high credit utilization rate will indicate that you are not fiscally responsible and less of a safe bet to lenders
What are the 3 major credit reporting agencies?
Equifax, Experian, TransUnion