Understanding the fundamentals of credit scores and how to manage them effectively is crucial for achieving financial freedom.
Credit scores are numerical representations of your creditworthiness based on your credit history. They typically range from 300 to 850, with a higher score indicating better credit health. Factors affecting your score include payment history, credit utilization, length of credit history, types of credit, and recent inquiries. To excel in credit score management, prioritize making payments on time, keeping credit utilization below 30%, regularly reviewing credit reports for inaccuracies, and avoiding opening too many new credit accounts at once. Consistent, responsible credit behavior will not only improve your score but also open doors to better financing options in the future.
A good credit score takes time to build, but it can be destroyed in an instant.
