The prices of goods and services seem to have risen dramatically in recent months. Those shopping trips cost more than last year and gasoline prices continue to rise.
(Hint: Try to consolidate trips to save time and use less fuel)
This article is about using credit wisely and monitoring your credit score.
What factors impact your credit score?
Top of the list for most credit reporting agencies (Experian, TransUnion, FairIsaac (FICO) and Equifax) is...
Payment History - how often you pay your bills on time and if payments are missed.
Credit History (differs from Payment History) - your credit history tracks the types of credit accounts you hold and how long you have had the account.
Next is your Use of Credit - the ratio of your available credit and the credit you have spent. Carrying high balances on your credit cards can have negative effects.
Balances - what you owe and whether you are making your minimum payments
New Credit and Credit Checks - Taking on new credit cards and whether you have had "hard" or "soft" credit inquiries.
An excellent article in Forbes Advisor (June 28, 2021) : What’s The Difference Between A Hard And Soft Credit Check? by Michelle Black explains the difference very well.
And lastly, Available Credit is how much of your total credit is still available.
Different credit bureaus have different models that calculate your 'score' - so credit scores may vary.
Why Do Credit Scores matter?
Good credit matters when:
Applying for a good mortgage rate
Buying a car or getting insurance
Setting up cell phone plans or utility services
Getting Business loans
Renting an apartment
Applying for a job
Education/College loans
Buying a house
Credit scores have become a fact of living, so keep an eye on how you use your credit this holiday season.
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