Improve Your Credit Score

What is Credit? What is a Credit Score?

Credit is the ability to receive goods or services before paying, with the understanding that you’ll pay later. Some examples of credit include:

• Utility bills
• Car loans
• Mortgages
• Student loans
• Credit cards (this is the most common) 

Whenever you use credit, it goes onto your credit report, which shows what types of credit you have used and how well you are able to pay things back. 

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A credit score is a number that is calculated from the information on your credit report. A higher credit score number means that you have a history of paying off your credit in full and on time. A lower credit score means that you have some trouble doing so.

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Why Should You Care About Your Credit Score?

Many people look at your credit score to make decisions on how to treat you. This includes:

• Landlords
• Banks
• Employers
• Insurance Companies

If your credit score is high, it means there is a high likelihood that you will pay back a loan, because you have shown this in the past. This means you are more likely to get approved for a loan and get better interest rates. If your credit score is low, it means that you will be seen as a risky borrower who may not be able to pay back the loan. This means you may not be able to get a loan, or if you do, you will have to pay higher interest on it.

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More Resources to Learn About Credit

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Summary

• Your credit score is a picture of your credit history that tells lenders how risky it is to loan you money, whether they should let you borrow money or not, and if so, at what interest rate. 
• A credit score will be used in many different situations in your life that involve borrowing money. 
• Building credit is a long process, so it is important to start as soon as you are comfortable and able to do so. 
• Make sure you keep track of your credit score, practice healthy spending habits and make all payments on time in order to maintain a good credit score.
• If you have a poor credit score, don’t worry! There are ways to improve it over time.