Credit Basics: What You Need to Know

Your credit score is like your financial report card—it tells lenders how responsible you are with money. Whether you’re trying to get approved for a loan, a credit card, or even an apartment, your score can make or break the deal. But don’t stress—I’ll break it down for you in a way that actually makes sense.

What Is a Credit Score?

It’s a three-digit number (300-850) that shows how well you manage debt. The higher, the better. Here’s the general breakdown:

• 300-579: 🚨 High risk—lenders will hesitate.

• 580-669: 🤔 Fair—some approvals, but not the best terms.

• 670-739: 👍 Good—you’re in solid shape.

• 740-799: 💪 Very Good—low risk, great offers.

• 800-850: 🔥 Excellent—top-tier, lowest interest rates.

What Impacts Your Score?

Your score is based on five key things:

1. Payment History (35%) – Pay on time, always. One late payment can hurt.

2. Credit Utilization (30%) – Keep your card balances low (below 30%, ideally under 10%).

3. Credit History Length (15%) – The longer you’ve had credit, the better.

4. Credit Mix (10%) – Having different types of accounts (credit cards, loans) helps.

5. New Credit (10%) – Too many hard inquiries (credit applications) can drop your score.

   
   

Why Your Score Matters

A strong credit score saves you money—lower interest rates, better loan approvals, and even lower car insurance rates. It can also be the difference between getting approved or denied for a place to live.

How to Improve It

✅ Pay bills on time, every time.✅ Keep credit balances low—don’t max out your cards.✅ Only apply for new credit when necessary.✅ Don’t close old accounts—it helps your history.✅ Check your report regularly for errors.

Final Thoughts

Your credit score isn’t set in stone. If it’s not where you want it to be, don’t panic—small, consistent actions can improve it over time. Stay on top of it, and you’ll see the results. Got questions? I got you! 😉

Committed to your financial success,

Alex at Greenfield Financial Solutions