What is a Credit Score?
A credit score is the numerical representation of your creditworthiness, aka how likely you are to repay borrowed money, influencing your ability to get loans, credit cards, and favorable interest rates. This figure typically ranges from 300-850, with the higher the number, indicating higher creditworthiness. This prediction of your credit behavior is typically scored by FICO, but VantageScore is also commonly seen.
If you’re unsure of your credit score, don’t worry, it’s very easy to check. If you would like to get a free copy of your actual credit report, you can do so once per year by going to www.annualcreditreport.com. You can also sign up for a Credit Monitoring service that will provide credit reports as part of your subscription.
What impacts my credit score?
1. Credit Diversity
Showing lenders that you’re able to manage varying lines of credit, such as student loans, a mortgage, and credit cards, is more favorable to them than if you just have a few credit cards. This gives them more history to evaluate, as well as shows your maintenance abilities.
2. Credit History
The longer that you have sustained credit and held credit lines, the less risky you are perceived by lenders. Simply put, this is the amount of time you have used credit to borrow money.
3. Credit Utilization
Credit utilization is the ratio of the amount of money you owe compared to the amount of credit you have been given. The lower your percentage (of money owed versus line extension), the less risky you are perceived to be. Regularly paying down or off your balances each month makes your utilization more favorable.

4. Payment History
Payment history affects your credit score the most and reflects how consistently you make your payments on time.
5. Credit Applications
This pertains to the number of inquiries you have on your credit history. Typically, consumers who are applying for a multitude ot loans (mortgage, credit cards, even applying to new residences sometimes) in a short period of time are viewed to be riskier by potential lenders. Most inquiries will fall off of your credit within two years, so try to limit or space out your credit applications when possible.