Greetings to all. I am Success Jenkins and I welcome you to my financial blog. My desire is to educate and motivate my audience about Financial Wellness and how to achieve it. Every Friday I will be posting a new blog that will address various topics, giving tips and/or sharing events that one can attend to learn more about Financial Wellness.
Today, we will be looking into what a Credit Score is and what it consists of. A credit score is a three-digit number ranging from 300 to 850 designed to represent the likelihood you will pay your bills on time. People with higher credit scores generally receive more favorable credits terms, which may translate into lower payments and less paid interest over the life of an account. A person’s credit score may also determine the size of an initial deposit required to obtain a smartphone, cable service or utilities, or to rent an apartment. A credit score usually falls into five ranges. The range of 300-579 is considered poor credit. The range of 580-669 is fair credit. The range of 670-739 is good credit, while the range is 740-799 is considered very good. Finally, the range of 800-850 is excellent credit and is most desired. When applying for loans or lines of credits, many lenders or creditors feel more confident to approve requests from individuals with higher credit scores.
A credit score is broken down into 5 parts. At 35%, the biggest part of a credit score is the payment history of a person. It shows whether a person pays their obligations on time. Right behind this at 30% is the outstanding debt a person has. It considers the
percentage of credit available to a person that is currently being used, which is known as credit utilization. These two parts constitutes two thirds of the credit score and are heavily reflective of the individual’s financial responsibleness. 15% of the credit score is the length of credit history. A person is with longer credit history has more data to determine their payment history and can be considered less risky. New Credit and Credit mix, both respectively, are 10%. New credit factors in how many new accounts a
person has and how many new accounts a person has applied for recently. Credit mix looks at the installment credit, such as car loans, mortgage loans and revolving credit such as credit cards.
I, like many others, constantly shoot for that 800+ credit score. It opens doors to a lot of opportunities and saves a person money in the long run. It plays a big part in your Financial Wellness. Just as I discussed in the previous blog, it is an ongoing activity. Just because you hit 800 this month does not guarantee that it will be 800 the next month, so we must continue to work at keeping it there. Join me
, and many others, on our journey to Financial Wellness and that Excellent Credit Score. For more info on building your credit score and/or repairing it, contact me by click here or going to my contact me page. Have A GREAT Day On PURPOSE & An Amazing Year Of Financial Wellness!!!