Making Sense of your Credit Score

Making Sense of your Credit Score

April 17, 2024

Credit is an important tool for many Americans. If you need to apply for a loan or credit card, lenders or card issuers will rely on your credit history in evaluating your credit worthiness and whether to proceed.

You probably have encountered your credit score at some point in such a process. This is a three-digit assessment of your credit worthiness that has the potential to impact your financial health. Here are a few tips to understanding your credit history and credit score, and tips for improving both.

First, there are a few key things you can do to establish a positive credit history: Charge only items that you can pay off in a month or two; pay your bills on time; and use a credit card for large purchases rather than on small items, like restaurant meals.

You can check your credit score to see how others assess your credit worthiness. The score is a three-digit number from 300 to 850 that constantly changes, due to your credit history.

A score of 700 or above is considered good by many lending standards. You can request a copy of your credit score from the three major credit reporting companies, Experian, Equifax, and TransUnion.

Next, check your credit report once or twice each year, making sure that there are no errors and to review whether you’re paying your bills on time and staying within your established credit limits. You can receive a free copy of your credit report once each year from

If you spot any errors, report the discrepancies to the appropriate credit bureaus (the report may differ among the three). They are required to take reasonable steps to correct any errors.

You can do several things to boost your credit score. The best ways include paying your bills on time, decreasing the amount of debt you carry, and staying within your established credit limits.

Finally, if you’re are a first-time credit seeker and are applying for a credit card or loan, for instance — you may have to establish your credit score, which you can do in several ways, including by getting a secured credit card or by becoming an authorized user of someone else’s card.

By overseeing your credit history and managing your credit score, you’re taking important steps to improving your overall financial health.

Lean on me. As a financial professional, I’m here to help you with your financial goals. If money management has you flustered, call me for an appointment. Together, we can work out strategies to save you time, lighten your load, and help you implement your financial plans.

Wherever your goals take you, we can help you get there. We help our clients to navigate these and other important decisions that impact their economic future.

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This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. This material was prepared by LPL Financial, LLC