Credit scores help lenders determine, at a fundamental level, whether or not to give a loan to an individual. According to Credit.com, credit scores “help lenders decide whether [a person] is a good risk.”
With something as important as credit, you’ll want to know what precisely good means. Thankfully, the answer to “what is a good credit score” is made transparent by FICO.
Despite their importance, only 21% of Americans have a good credit score. So if you find yourself missing payments or in credit card debt due to keeping up with jones, it’s time to evaluate your spending.
1. Payment history (35%): how often you miss or make your credit obligations 2. The total amount owed (30%): how much of your entire credit you’ve used 3. Length of credit history (15%): how long you’ve used credit 4. Types of credit (10%): how diversified your credit mix is 5. New credit (10%): how many new credit accounts you’ve opened recently