Credit scores can be scary. In fact, they can be downright depressing. But City Real Estate has got your covered! Take a look below where we’ll describe what a credit score is, the factors that make up a score, and even what yours should be!
What is a Credit Score?
Your credit score is a three-digit number that correlates to how likely you are to repay your debt. The lowest credit score is 300 while the highest score is 850. You should strive for your score 700 or above.
What Makes Up a Credit Score?
A credit score is calculated by three different bureaus: EquiFax, TransUnion, and Experian. There are many misconceptions about scores that have the potential to scare you. However, once you dissect what factors contribute to your score, you are able to adjust your financial actions to positively impact your score.
Factors such as credit use, number of active credit cards, amount of inquiries, and even the length of time you have credit are all vital components of a credit score.
Raise Your Score!
Because your score will be the main deciding factor for monumental moments (i.e. buying a house, car, etc.), it’s important to try to raise your score to the best of your ability. Perfection is not necessary; it’s nearly impossible! But, slight and gradual improvements can affect a score drastically! Do the following to increase your score:
- Ensure ALL bills are paid on-time.
- Pay off your debt.
- Do not open multiple accounts.
- Do not close accounts that have a $0 balance; keep them open and do not use them.
- Pay off accounts that are in collections. Keep in mind that it will stay on your report for seven years.
For more tips and tricks to raise your score, click here!
Know Your Number!
Check out this short video below to learn more about “knowing your number!”