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APRIL 2024

Video: How to improve your credit score

Your credit score is a three-digit number, from 300 to 850, that represents your credit worthiness, or the likelihood you’ll pay your bills on time. The credit score model was created by the Fair Issac Corporation, now known as FICO, and is used by financial institutions. While other credit scoring systems exist, the FICO score is most commonly used.

There are several factors that go into calculating your credit score, including your payment history and the total amount of credit you have. Credit card companies and lenders may consider your credit score when deciding whether to approve you for a new account or what interest rate you qualify for.

Having a good credit score — one that’s over 670 — makes it easier to achieve major milestones, such as renting an apartment, buying a car or getting a mortgage for your first home.

If you haven’t applied for a credit card yet, you can build a good credit score by making on-time payments to your cell phone or utility bill. If your credit score is low or has dropped, you can take steps to raise it, such as applying for a secured credit card that requires a deposit before use, usually starting at $200.

Building and maintaining a good credit score is important — and doable. Check out the simple tips in the video below to help you get started.

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Sources:
Consumer Financial Protection Bureau. How can I improve my credit score?
CNBC. The beginner’s guide to credit scores: How to understand and improve your credit score.