Credit Scores

Why Your Score is Important

As far as your financial life is concerned, your credit score is the most important thing. Your credit score determines whether or not you qualify for a loan, what your interest rate will be and how high your credit limit may be. (You may also hear your credit score referred to as your "FICO Score"). Your score is based off of your credit history, which is collected in your credit report. Learn more about credit reports.

What Affects Your Score Positively

The following are a few things you can do to help your credit score:

• Keep your balances under 30% of your total credit limit
• Keep a good re-payment history
• If you have a credit card – use it regularly and pay off the entire balance

Also keep in mind that when it comes to your credit report, secure loans (ex: car loan) look better than unsecured loans (ex: line-of-credit).

What Affects Your Score Negatively

The following are things you should avoid in order to keep a good credit score:

• Late payments or no payments – avoid collections (including medical)
• High balances or going over your credit limit
• Having a lot of credit cards – you should have 2 or 3 max
• Applying for/Opening many new credit accounts and loans in a short timeframe. (Even if you aren't approved, all of the inquiries will still look bad on your report.)