Mastering Your Credit Score: How to Boost Your Creditworthiness
Part 1: Understanding Your Credit Score Your credit score is a three-digit number that represents your creditworthiness. It is used by lenders, landlords, employers, and even insurance companies to evaluate your financial responsibility and risk level. A higher credit score means that you are more likely to be approved for loans and credit cards with better interest rates and terms, while a lower score can lead to higher interest rates or even denial of credit. If you want to boost your creditworthiness, the first step is to understand how your credit score is calculated. The most commonly used credit scoring model is the FICO score, which ranges from 300 to 850. Your FICO score is based on five main factors, each with a different level of importance: Payment History (35%): This factor is the most important in determining your credit score. It reflects your past payment behavior, including any late payments, delinquencies, or accounts that have gone into collections. Making all y...