Credit scores can be a tricky business. For someone who is new to personal finance and financial responsibility, credit scores can seem a bit of a mystery. There are many facets to your credit score—several things impact your score and there are several ways to maintain a better rating. Of course, before worrying too much about what your actual score is you should try to carefully understand what a credit score does. Most lenders and banks use a FICO score to obtain a fast and objective measure of your credit risk. This FICO calculation gives lenders a snapshot idea of how reliable you are at paying back money and how responsible you are with money in general. For this reason, it’s important that you do what you can to maintain a strong credit score. By understanding the factors that hurt and help your credit score, you can gain a stronger understanding of how lenders view your credit risk and, ultimately, how you can improve your score. These are three important factors that go into calculating an average credit rating (of course, scores are different depending on the individual). Continue reading →