What Is A Credit Score?
According to Investopedia, a credit score is a 3 digit number that rates your creditworthiness. A credit score is based on your credit history, which includes a number of factors, such as the number of accounts, total amount of debt, repayment history, and a lot more. Essentially, a credit score indicates to a lender the likelihood of you repaying a loan.
Why Is It Important?
Having a well established credit score is very important. A good credit score can lead to a number of opportunities and benefits. Some benefits that a good credit score will lead to can include:
1) Access to loans and credit cards
2) Lower interest rates
3) Employment opportunities
4) Better insurance rates
Establishing Credit History
Having a strong credit history is essential in order to gain access to more financial opportunities. Some tips you can use in order to establish a strong credit history include:
1) Apply for a credit card
2) Make sure to pay your bills on time
3) Don't exceed 20-30% of your credit card limit
4) Apply for a student credit card
5) Don't close a credit card even if not being used
6) Become an authorized used on someone else's credit card
7) Keep credit card balances low
8) Avoid too much debt
