what is a credit score?

conquering credit & credit cards

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So, you know you need good credit to get a lot of things in life – like leasing a car, buying a home, and more. But, where do you find your credit score? How do you read a credit score? We’ll show you in this lesson.

what is a credit score?

conquering credit & credit cards

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  • Overview
  • Transcript
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what is a credit score?

conquering credit & credit cards

So, you know you need good credit to get a lot of things in life – like leasing a car, buying a home, and more. But, where do you find your credit score? How do you read a credit score? We’ll show you in this lesson.

As we’ve said in many lessons in this course, building credit is important for a lot of important things in life – from getting loans to cars, apartments, mortgages, and more. The credit score is what shows those assessors the state of your credit. But how do we find our credit scores and how do we read them? Let’s take a look.

 

How you check your credit score: use a free service

  • Many services and websites like Credit Karma, Equifax, Experian, and more allow you to check out your credit score for free.
  • But, be careful, because some of them might start free and then start to charge you after a certain period.
  • They’ll need your social security number to check your score and will almost definitely request your email address in return for their free service, but the good thing about that is they can email you anytime there’s an increase or decrease in your score. It’s nice to be kept up to date!
  • You might also see or hear the term “FICO score.” That refers to the model that’s used to generate your credit score.

 

Understanding your score – what do the numbers mean?

Credit standing is based on a range of numbers. Generally, the higher your score is, the better it is considered in the eye of a lender. There are five categories: Excellent, Good, Fair, Poor, Very Poor. This standing might vary depending on the credit rater, but generally here’s how the numbers break out:

  • Excellent – 781 – 850
  • Good – 661 – 780
  • Fair – 601 – 660
  • Poor – 500 – 600
  • Very Poor – 300 – 499

 

A lot of loans (mortgages, car leases), credit cards, and more require you to have “Good” or better credit scores in order to get them. Not always, but a lot of the time. Also, in many cases you’ll be able to get lower interest rates on what you borrow if your score is higher.

You’ll want to keep track to make sure your score is good for when you need it most!

what's in this lesson?

So, you know you need good credit to get a lot of things in life – like leasing a car, buying a home, and more. But, where do you find your credit score? How do you read a credit score? We’ll show you in this lesson.

Transcript

As we’ve said in many lessons in this course, building credit is important for a lot of important things in life – from getting loans to cars, apartments, mortgages, and more. The credit score is what shows those assessors the state of your credit. But how do we find our credit scores and how do we read them? Let’s take a look.

 

How you check your credit score: use a free service

  • Many services and websites like Credit Karma, Equifax, Experian, and more allow you to check out your credit score for free.
  • But, be careful, because some of them might start free and then start to charge you after a certain period.
  • They’ll need your social security number to check your score and will almost definitely request your email address in return for their free service, but the good thing about that is they can email you anytime there’s an increase or decrease in your score. It’s nice to be kept up to date!
  • You might also see or hear the term “FICO score.” That refers to the model that’s used to generate your credit score.

 

Understanding your score – what do the numbers mean?

Credit standing is based on a range of numbers. Generally, the higher your score is, the better it is considered in the eye of a lender. There are five categories: Excellent, Good, Fair, Poor, Very Poor. This standing might vary depending on the credit rater, but generally here’s how the numbers break out:

  • Excellent – 781 – 850
  • Good – 661 – 780
  • Fair – 601 – 660
  • Poor – 500 – 600
  • Very Poor – 300 – 499

 

A lot of loans (mortgages, car leases), credit cards, and more require you to have “Good” or better credit scores in order to get them. Not always, but a lot of the time. Also, in many cases you’ll be able to get lower interest rates on what you borrow if your score is higher.

You’ll want to keep track to make sure your score is good for when you need it most!

Additional Resources

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