You are looking to make a purchase, such as a new cell phone or a car, but you need time to be able to pay the full amount. Or you can sign up for a new credit card, with no purchase in mind. In both situations, there is one constant: your credit score. Think of it as that three-digit number that follows you wherever you go.
“Your credit score is basically a measure that financial institutions and other lenders use to gauge how responsibly you’ve borrowed money,” says Priya Malani, founder and chief executive officer of Hide the wealth.
Your credit score comes into play when you qualify for credit cards, mortgages, and personal loan rates. Credit scores are calculated using different scoring models (FICO vs VantageScore) and by different credit companies such as Experian, Equifax and TransUnion. Most credit scores are between 300 and 850 – and the higher the number, the lower your interest rate will be on your loans.
If you are looking to improve your score, there are several ways to improve it. Watch the video above to learn more.
Learn more about Investing in You:
Here’s what your credit score means and how it affects you
Here’s an easy way to make a monthly budget and start saving money
81% of American adults are worried about a recession this year, survey finds
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Disclosure: NBCUniversal and Comcast Ventures are investors in tassels.