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Demystifying Credit Scores: How They’re Calculated and Why They Matter
You’ve heard time and time again that you need good credit for your financial health. But how do you know what your credit is, or if you even have credit at all?
Your fico score is one of the most important numbers you’ll ever know in our credit-driven world. This three-digit number can affect everything from the interest rate you pay on a car loan to whether or not you’re approved for a mortgage. So what goes into this all-important calculation? And why do your credit score and credit history matter so much? In this article, we’ll break it all down for you.
Managing your credit can be very difficult, especially if you don’t know where to begin. This article will describe how your credit score is calculated, what you should strive for to achieve your financial goals, and how Lever can help you make the most of your money while building your credit.
The Score
The FICO score is the most widely used metric for gauging a consumer’s creditworthiness. Not only does it dictate IF you qualify for a line of credit, but it also determines the interest rate you pay. Look at the two examples below:
