Myths and Misconceptions About Credit Scores

Your credit score plays a crucial role in determining your financial health and eligibility for loans, credit cards, and even housing. How you use your credit cards has a significant impact on this score, making it essential to understand the factors involved. In this guide, we'll explore how credit scores work, the role of credit card usage, and practical tips for maintaining a good score. Let's dive into each key area.What is a Credit Score and Why Does It Matter?A credit score is a numerical representation of your creditworthiness, ranging from 300 to 850 in most scoring models. This score is calculated based on the information found in your credit report, which includes your payment history, amounts owed, length of credit history, types of credit used, and new credit inquiries. The most widely used scoring model is the FICO score, but others, like VantageScore, also play a role in credit evaluations.
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