TENCU Chronicles

Think of your credit score as your financial report card. A three-digit number tells lenders how trustworthy you are with borrowed money. Scores typically range from 300 to 850; the higher your score, the better your chances of getting approved for loans and snagging lower interest rates.

Why Do Credit Scores Matter?

Your credit score can affect:

• Loan Approvals: A good score can open doors to mortgages, car loans, and personal loans.
• Interest Rates: Higher scores mean lower rates, saving you money in the long run.
• Renting an Apartment: Landlords often check credit scores to ensure you’ll pay rent on time.
• Job Applications: Some employers review credit as part of their hiring process.

How Is a Credit Score Calculated?

Several factors determine your score:

1. Payment History (35%): Pay your bills on time!
2. Credit Utilization (30%): Keep your balances below your credit limit.
3. Length of Credit History (15%): The longer your history, the better.
4. Credit Mix (10%): A mix of credit types (credit cards, loans) is beneficial.
5. New Credit Inquiries (10%): Too many applications can ding your score.

Tips to Improve Your Credit Score

1. Pay Bills on Time: Set reminders or automate payments.
2. Keep Balances Low: Aim to use less than 30% of your credit limit.
3. Limit New Credit Applications: Apply only when necessary.
4. Check Your Credit Report: Look for errors and dispute inaccuracies.
5. Be Patient: Building good credit takes time.

Your credit score is a powerful tool for shaping your financial future. By understanding how it works and taking steps to improve it, you can unlock better economic opportunities and save money. Start building healthy credit habits today—your future self will thank you!