Credit Education

Credit Basics

Master the fundamentals of credit reports, scores, and credit building. This comprehensive guide will give you the foundation you need to understand and improve your credit profile.

📚 5 min read

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What is Credit?

Credit is your ability to borrow money or access goods/services with the understanding that you'll pay later. It's based on your creditworthiness - how likely you are to repay debts on time.

Credit allows you to make purchases before paying
Your credit history determines your creditworthiness
Good credit opens doors to better financial opportunities

Credit Reports Explained

Your credit report is a detailed record of your credit history, maintained by credit bureaus. It contains information about your accounts, payment history, and public records.

Three major bureaus: Experian, Equifax, TransUnion
Contains account information, payment history, and inquiries
Updated monthly by creditors and lenders
Free annual reports available at AnnualCreditReport.com

Credit Score Factors

Your credit score is calculated using five main factors, each weighted differently in the scoring model.

Payment History (35%) - Most important factor
Credit Utilization (30%) - Amount of credit used vs available
Length of Credit History (15%) - Age of accounts
Credit Mix (10%) - Variety of credit types
New Credit (10%) - Recent inquiries and new accounts

Credit Score Ranges

Understanding where your score falls and what it means for your financial opportunities.

800-850

Exceptional

Best rates and terms available

740-799

Very Good

Above-average rates and terms

670-739

Good

Near or slightly above average

580-669

Fair

Below average, may require deposits

300-579

Poor

Significant credit challenges

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