Understanding Your Credit Score – The Basics You Need to Know

Your credit score is more than just a number—it’s a key that can open doors to financial opportunities or close them. Understanding what affects your credit score is the first step toward building a healthy financial future.

What is a Credit Score?

A credit score is a three-digit number that represents your creditworthiness. Lenders use it to decide whether to approve loans, credit cards, or mortgages, and what interest rates to offer.

Key Factors Affecting Your Score:

• Payment History (35%) – Timely payments are critical. Late or missed payments can significantly lower your score.

• Credit Utilization (30%) – How much of your available credit you use. Keeping balances low is ideal.

• Length of Credit History (15%) – The longer your accounts are open, the better.

• New Credit (10%) – Opening too many new accounts at once can hurt your score.

• Credit Mix (10%) – A healthy mix of credit types (credit cards, loans, etc.) shows you can manage different types of credit responsibly.

Why It Matters:

A higher credit score can lead to better loan approvals, lower interest rates, and even advantages in renting or employment opportunities.

Tip: Regularly review your credit reports for errors and work with a trusted credit restoration team to address inaccuracies.