A credit score is a number measured between 300 and 900 that measures the creditworthiness of a consumer. First introduced in 1989 by Bill Fair and Earl Isaac, credit scores provide an unbiased structure for evaluating people objectively. Before credit scores emerged, people could be denied credit for very subjective reasons.
A person’s score is evaluated by a person’s ability to repay a loan. Lenders, such as banks and credit card companies, use credit scores to evaluate the risk of lending money to consumers. If a person has a history of being late on bills or has a lot of debt, they may have a low credit score. This leads to this person being denied a loan, credit card, or insurance.
Having a good credit score can improve your life in a myriad of ways. Consistently paying your bills and credit card statements on time leads to having a higher score. This allows you to get better insurance rates or qualify for a cheaper mortgage rate to buy a home.
In a recent MyBankTracker survey, it was revealed that 49.7% of millennials don’t own a credit card. And 53% of those aged 18 to 24 said they don’t have a credit card and never applied. For young people entering the world of adulthood, it is of the utmost importance to establish credit – good credit at that.
If you’re interested in learning about credit scores, please take a look at the following infographic. It details everything you need to know about your credit score and how to boost and maintain it. The infographic provides all the tools needed to attain and maintain an ideal credit score. Check it out below.
Infographic designed by Creditpicks.