How long has it been since you’ve checked your credit score? On average, only 41% of Americans check their score once a year. That’s not a bad thing, but if you’re interested in purchasing a home, you will want to start looking into your score and how you can improve it if it needs a little work.
Understanding Your Score
If you’re getting a loan, trying to rent an apartment, or applying for a job – your credit score will likely be reviewed. The higher the score, the lower the risk and the more appealing you look on paper. Your credit score is determined using several different pieces of credit information in your report such as amounts owed, length of credit history, payment history, credit mix, and new credit. The data is then grouped into the five categories in the pictured chart, and weighted accordingly. Your FICO credit score considers both the positive and negative information in your report; a high balance might lower your score, while a good track record of payments on time will raise your credit score.