What You Need to Know About Credit Scores


If you’re an adult with any interest in owning stuff, you’ve probably heard a lot about your credit score. You probably even know the basics: it’s an outline of how trustworthy companies think you are with debt. If you pay your debts on time, you’ll have a good score. If you don’t, you won’t.

However, how much do you really know about credit scores? Today, we’re taking a closer look at the facts you need to know about that ever-present number, and how it affects your financial life. Remember: the better your score, the easier things will be for you in general.

What Does Your Credit Score Mean?

Your credit score reflects a few things. Namely, how trustworthy companies think you are with borrowing money. Your score shows how long your credit history is, how often you pay debts on time, and how much debt you have paid off in the past. If these things reflect well on you, your score will be a higher number.

However, if you’ve had issues with debt in the past, or still are having issues, your score might be lower. A low score can make many things difficult, like getting a car loan or mortgage. People with low credit scores often find it more difficult to get decent interest rates. In short, having bad credit is likely to make it harder to get good credit.

How to Fix Bad Credit

If you’ve got bad credit, don’t panic. While this may make things tough, it isn’t a death sentence. Just follow a few steps and be patient with it so that you can get your score up. Try getting rid of your current debts first. Make sure you’re making at least the minimum payments, and making them on time. Likewise, don’t let your bills pile up and then pay them back all at once. Make the payments consistent.

If your credit is low due to a short credit history, this isn’t a tough fix. Get a personal loan you can easily pay back, or a credit card with a low limit. Making consistent, on-time payments will help to build your credit history. This, in turn, will build up a strong credit score. Once you’ve got a higher score, you can get bigger loans, like for a car or mortgage.

Just stay at it, and stay patient. Your score won’t change overnight. It’s a matter of hard work and dedication. Keep your payments consistent and you’ll see the score repairing itself over time.