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Financial Literacy for Students: Credit Score

What is a Credit Score?

A credit score is a prediction of your credit behavior, such as how likely you are to pay a loan back on time, based on information from your credit reports.

Companies use a mathematical formula—called a scoring model—to create your credit score from the information in your credit report. 

Why Does My Credit Score Matter?

Your Credit Score can affect many things in your life, including but not limited to:

  • ability to open a credit line
  • ability to rent/buy housing
  • ability to buy a car
  • insurance rates
  • employment

Credit Bureaus

If you fear that your identity or credit card may have been compromised, it is suggested to contact the three credit bureau's to freeze your credit. This way, no one else can open any credit lines in your name/using your information. Just remember that you will have to unfreeze it if you plan to apply for any credit lines yourself.

What Affects My Score?

  • Payment History
    • Do you make all of your credit payments? On time?
  • Amount Owed
    • Total amount of credit that you owe
  • Length of Credit History
    • Average amount of time that you have had all of your credit lines
      • For example if you have had a credit line for 5 years, and you open a new credit line, your new average is 2.5 years
  • New Inquiries
    • When you apply for a credit line, your credit is "pulled", this is an inquiry into your credit
  • Credit Utilization
    • Percentage of credit used out of total available credit
  • Credit Mix
    • Variety of credit lines that you have
    • Examples: Mortgage, Credit Cards, Loans, etc.

How Can I Check My Score?

You are legally entitled to request and receive a full Credit Report (this is not your Credit Score) once per year from each of the three Credit Bureaus, Equifax, Experian, and TransUnion. You can also use AnnualCreditReport.com

There are other ways to keep track of your score, just keep in mind that these methods may not be wholly accurate as they are estimates.

  • Credit Karma
  • Most Credit Card Companies
  • myFICO
  • Intuit
  • and more

Contact

James A. Cannavino Library

3399 North Road
Poughkeepsie, NY 12601
(845) 575-3106

In the Library