Breaking Down Your Credit Score
Borrowing
In the same way your GPA can impact your academic performance now and in the future, your credit score can impact many of life’s financial decisions. Here are some quick tips to help you understand your credit score and keep it at a healthy number.
- Your credit score is a number that represents your level of trustworthiness among financial institutions and credit card companies. Most institutions take your credit score into consideration before issuing you a loan or credit card.
- Credit scores can range from 300 – 850. Your score could be the determining factor in getting denied for a loan, or whether you receive a high or low interest rate on the loan. The higher your credit score, the lower your interest rate.
- While there are five different factors that make up your credit score, keeping your credit card balances low and ensuring payments for any loan are always paid in full and on time are the best ways to maintain a healthy score.
- You’re entitled to one free credit report each year from one of the three major credit reporting bureaus. Incorrect info can lower your score, so always check the reports annually from each of these bureaus:
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Credit vs. Debit Transactions
Credit transactions are also referred to as signature-based transactions to earn points. Debit transactions are also referred to as PIN-based. PIN-based, point-of-sale, ATM transactions, cash withdrawals, and checks do not earn points.