How do we maintain our credit score when it is already high? And how do we get a good credit score at a young age?

Those are two questions. Let's take them in order. "How do we maintain our credit score when it is already high?" Make your payments on time, whether that means paying off your balance every month or taking longer and paying interest, "On time" is the thing that maintains your score. "How do we get a good credit score at a young age?" Get a job and stay in i t. Get a credit card, use it and pay what you owe on time. Your credit score stands in for many things that don't involve money. It represents your dependability to employers and landlords.

Is there a Poor, Fair, Good, and Excellent on the credit score?

Your score is a number. a credit score of 700 or above is generally considered good. A score of 800 or above on the same range is considered to be excellent. Most consumers have credit scores that fall between 600 and 750. In 2021, the average FICO® Score☉ in the U.S. reached 714—an increase of four points from the previous year. Higher scores can make creditors more confident that you will repay your future debts as agreed. But creditors may also set their own definitions for what they consider to be good or bad credit scores when evaluating consumers for loans and credit cards.

i was told credit matters the most

Credit matters, because it is used by institutions that have power over things that do not involve money at all. If you wish to rent an apartment, someone may check your credit score, figuring that if you are responsible with credit, you won't wreck the apartment you want to use. Similarly, some jobs for which you might apply might look at your credit score to see if you're likely to be a dependable employee. Credit score "stands in for" other things. That's why it is important.

Main content

Financial Literacy

Course: Financial Literacy > Unit 3

Lesson 1: Credit score

What is a credit score?

Name: What is a credit score?
Uploaded: 2022-11-28T23:01:06.741374192Z
Description: A credit score is a number that reflects how responsible a person is with borrowing and repaying money. Banks use this score to decide if they should lend money and what kind of interest rate they should give you.

Google Classroom

A credit score is a number that reflects how responsible a person is with borrowing and repaying money. Banks use this score to decide if they should lend money and what kind of interest rate they should give you. Created by Khan Academy.

Want to join the conversation?

Sort by:

Kayla Gonzalez
Posted 2 months ago. Direct link to Kayla Gonzalez 's post “How do we maintain our cr...”
How do we maintain our credit score when it is already high? And how do we get a good credit score at a young age?
Button navigates to signup pageButton navigates to signup page
(2 votes)
Answer
- David Alexander
  Posted 2 months ago. Direct link to David Alexander's post “Those are two questions. ...”
  Those are two questions. Let's take them in order.
  "How do we maintain our credit score when it is already high?"
  Make your payments on time, whether that means paying off your balance every month or taking longer and paying interest, "On time" is the thing that maintains your score.
  
  "How do we get a good credit score at a young age?" Get a job and stay in i t. Get a credit card, use it and pay what you owe on time. Your credit score stands in for many things that don't involve money. It represents your dependability to employers and landlords.
  Button navigates to signup page
  (3 votes)
2045687
Posted 2 months ago. Direct link to 2045687's post “Is there a Poor, Fair, Go...”
Is there a Poor, Fair, Good, and Excellent on the credit score?
Button navigates to signup pageButton navigates to signup page
(1 vote)
Answer
- David Alexander
  Posted 2 months ago. Direct link to David Alexander's post “Your score is a number. ...”
  Your score is a number.
  a credit score of 700 or above is generally considered good. A score of 800 or above on the same range is considered to be excellent. Most consumers have credit scores that fall between 600 and 750. In 2021, the average FICO® Score☉ in the U.S. reached 714—an increase of four points from the previous year. Higher scores can make creditors more confident that you will repay your future debts as agreed. But creditors may also set their own definitions for what they consider to be good or bad credit scores when evaluating consumers for loans and credit cards.
  Button navigates to signup page
  (3 votes)
MasonG
Posted 2 months ago. Direct link to MasonG's post “I have no questions”
I have no questions
Button navigates to signup pageComment on MasonG's post “I have no questions”
(1 vote)
Answer
Kayla Gonzalez
Posted 2 months ago. Direct link to Kayla Gonzalez 's post “What is a good bank to st...”
What is a good bank to start your financial journey?
Button navigates to signup pageComment on Kayla Gonzalez 's post “What is a good bank to st...”
(1 vote)
Answer
- David Alexander
  Posted 2 months ago. Direct link to David Alexander's post “Your neighborhood bank mi...”
  Your neighborhood bank might be a friendlier place to start out. Unless you're going into business, it may be enough for everything you ever need.
  Button navigates to signup page
  (1 vote)
MatthewS
Posted 2 months ago. Direct link to MatthewS's post “i was told credit matters...”
i was told credit matters the most
Button navigates to signup pageButton navigates to signup page
(0 votes)
Answer
- David Alexander
  Posted 2 months ago. Direct link to David Alexander's post “Credit matters, because i...”
  Credit matters, because it is used by institutions that have power over things that do not involve money at all. If you wish to rent an apartment, someone may check your credit score, figuring that if you are responsible with credit, you won't wreck the apartment you want to use.
  Similarly, some jobs for which you might apply might look at your credit score to see if you're likely to be a dependable employee.
  Credit score "stands in for" other things. That's why it is important.
  Button navigates to signup page
  (3 votes)
KaylenB
Posted 4 months ago. Direct link to KaylenB's post “no questions”
no questions
Button navigates to signup pageButton navigates to signup page
(0 votes)
Answer
Shernayah
Posted 4 months ago. Direct link to Shernayah's post “no questions.”
no questions.
Button navigates to signup pageButton navigates to signup page
(0 votes)
Answer
jose
Posted 4 months ago. Direct link to jose's post “i have no questions”
i have no questions
Button navigates to signup pageButton navigates to signup page
(0 votes)
Answer
Shamello
Posted 4 months ago. Direct link to Shamello's post “I have no Questions.”
I have no Questions.
Button navigates to signup pageButton navigates to signup page
(0 votes)
Answer
Wasila Islam
Posted 2 months ago. Direct link to Wasila Islam's post “what is the purpose of wr...”
what is the purpose of writing you have no question? just ssshh and everyone will know you have no question
Button navigates to signup pageComment on Wasila Islam's post “what is the purpose of wr...”
(0 votes)
Answer

Video transcript

- Your credit score is a measure, some would argue an imperfect measure, of how likely you are to pay for things on time. Let's say you were to take a loan. How likely are you to pay, make the payments on that loan? If you were to get a lease on an apartment, how likely are you to pay rent on time? Now, there are three credit bureaus. They are TransUnion, Experian, and Equifax, and what happens is, is let's say that you have a credit card and as you pay that credit card, pay the balance, or pay the minimum payment on time, or you don't pay on time, that gets reported to these bureaus. These bureaus use an algorithm that comes from a company called FICO. It used to stand for Fair Isaac Corporation, and that gives you a score, and each of the three bureaus will have a score between 300 and 850. If you have a score near the high end of that range, if you're in the high 700s or above, that is an excellent credit rating. People will give you loans. It will be easy for you to lease things, and not only when you get that loan, it will actually be at a lower interest rate. If your credit score is in the 600 to low 700 range, that's decent, you're probably okay, although you might, in certain cases, have to pay a higher interest rate than the people with the excellent credit. And then if your credit score is in the low range, which would be anywhere from 300 to say the high 500s, you're going to have trouble getting a loan, or in many cases getting a lease, or even if you do, you're going to have to pay a higher interest rate. Now, the ways to get as high a credit rating as possible, is pay your bills on time, pay your rent on time, have a long credit history. It's good to have credit. So it's good to have a credit card that has a high limit, but to use as little of that as possible. So good luck (laughs) with your credit scores.