Step 5 – Understand Your Credit Score

What Is A Credit Score?

A credit score is a computer–generated number based on a formula which indicates your ability and willingness to repay a debt based on the information in your credit report.

Scores are not static; they change over time as your credit and credit behavior change over time

• Payment History
• Outstanding debt
• Credit History
• New credit accounts
• Types of credit in use

What is the purpose of a credit score?

A credit score is a number which lenders use to help them to decide:

• "If I give this person a loan or credit card, how likely is it that I will get paid back on time?"
• Whether to approve a loan and how much interest and fees to charge.

Can I improve my credit score?

Caution: It is important to note that raising your score takes time. There is no quick fix. In fact, quick–fix efforts can backfire.

Always make sure that the information in your report is correct and that you manage your credit responsibly over time.

Click here to view the tool How To Maintain Your Credit Report