By now, most graduates have waved goodbye to grades, at least for the summer. But whether graduation was long ago or last week, you’re still being graded in one way you may not have realized: your creditworthiness.
Credit scores may be an evaluation of your creditworthiness, one way or another. In that sense, scores are very much like grades—you’re in control, and good, steady credit habits can go a long way. But just like with school grades, it also helps to have an idea of what credit score calculations are based on. That way, you can figure out what you need to work on so your credit’s at the top of the class when it counts—applying for a rewarding credit card, getting a great mortgage rate, and other situations where good credit may be critical.
Most credit scores can share some similarities in what they value. In approximate descending order of importance (most impact to least impact), theseSeveral factors tend tomay influence credit scores of all kinds, including:
If this seems overwhelming, don’t worry. Just make sure you’re doing your best to pay your bills on time and regularly check in on your credit. When you’re ready to take a deeper dive, look at how you can work on some of the above factors. With just a little bit of studying, you can graduate to a higher level of credit knowledge.