Your credit score is a crucial element of your financial health, influencing everything from loan approvals to interest rates and even job opportunities. Ranging from 300 to 850, credit scores are calculated using models like FICO and VantageScore, with good scores starting at 670 and 661, respectively. The score reflects your creditworthiness based on your credit history, which includes payment history, credit balances, length of credit history, and credit mix. A high score indicates reliability to lenders, leading to better borrowing terms. Conversely, a low score can hinder your ability to secure loans and result in higher interest rates. To improve your credit score, focus on timely bill payments, maintaining a low credit utilization ratio, and considering credit-builder accounts. Understanding the factors that affect your credit score and actively managing them can significantly enhance your financial prospects and open doors to better opportunities.
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