What is a good credit score? These factors can impact your score.

Credit scores play a big role in your personal finance spending and decisions. But do you know how credit scores work and why are they so important? FICO, which stands for the Fair Isaac Corporation, created the first credit score model in 1989. Thanks a lot. The brand was a pioneer in developing a way to calculate credit scores on a scale between 300 and 8:50. You do not want a 300. Today it’s known as the most widely used and accepted credit score. FICO provides the algorithm for the credit score, but there are three major credit bureaus that you might have heard of that provide data for the credit reports Equifax. Experian and TransUnion. About 67% of Americans have a FICO credit score of 670 and above. According to experience ranking them as good, very good, or exceptional, Thank you. But these numbers just serve as a baseline. Your credit score is based on a bunch of different factors, like payment history, which is one of the biggest components. Making payments on time can help your score. Missing payments or filing bankruptcy can hurt it. And in case you’re wondering, there isn’t really a good credit score to have at a certain age. Young people checking their credit score might be surprised to see a low number, but it doesn’t necessarily mean you’ve done something wrong. Might just be because they don’t have enough credit history yet.