Do you have a credit score of 740 or more? Well then you must be a financial success! Or maybe not….
What does that credit score really mean?
According to MyFICO.com, a credit score is made up of five categories:
Payment history – do you pay your bills on time? Amounts owed – the lower the balance the better (but not stagnant at zero) Length of credit history – the longer the better New credit – some is okay, too much is a red flag Types of credit used – it’s best if you have credit cards and installment loans (car loan, student loans, etc.) and manage them responsibly
So let’s step back for one second here. After reviewing these five categories, what actions actually build up a high credit score?
You continually use debt, but you pay your bills on time You have student loans, car loans, mortgage loans, . . . → Read More: What If I Had a Zero Credit Score? The Pros and Cons…