Do You Know What Your Credit Score Is?
Your credit score shows lenders how reliable of a borrower you are or how risky it may be for them to extend credit to you. There are many different credit score calculations out there but these days the one most frequently used is your FICO score.
What is a FICO Score?
FICO stands for Fair Issac Corporation, which is the company that provides the software to perform the calculations to get your credit score. FICO scores range from 300 - 850. The higher your score, the more reliable you are as a buyer. Your FICO Score takes into account many factors including:
- Your Payment History
- Your Debt (how much you owe)
- New Credit
- The Different Types of Credit You Have
- Length of Credit History (how long you have had each credit account)
Do Student Loans Affect Your Credit Score?
Yes! Student loans show up on your credit report as installment loans. If you make your student loan payments on time they are a great way to boost your credit score and establish a credit history.
How Do You Build Good Credit?
- Become an authorized user on your parents credit card account
- Once you feel comfortable with your spending, open your own credit card account
- Avoid large purchases that may take you a while for you to pay back
- Pay all of your bills on time
- Do not apply for multiple credit cards at one time
- Don't co-sign for your friends
- Protect your identity, check for unauthorized purchases made on your card and dispute them quickly. For more information on identity theft click here.
- Make your student loan payments on time