Your credit score can play a surprisingly big role in your financial life. From renting an apartment to getting a cellphone plan, your credit score can open doors or close them.
Your credit score predicts how likely you are to pay bills on time. Lenders, landlords and even some employers use this number to evaluate how responsible you appear to be. A higher score signals that you’re reliable with money, which can lead to lower interest rates on loans, better insurance premiums and easier access to credit. Some service providers may even waive security deposits if you have a strong score.
The most common credit scoring system is the FICO score, ranging from 300 to 850. A score above 670 is considered good, while anything above 740 is very good and above 800 is exceptional. Most scoring models look at similar factors, with payment history the most important. Making payments on time accounts for 35% of your FICO score, so even one late payment can hurt you.
