When looking into financial decisions like managing debt and applying for credit cards, you’ll usually be asked for several pieces of information. One critical metric is known as your “credit score”. Your credit score is one of the major ways that financial institutions measure how trustworthy of a borrower you are.
Knowing your credit score is a big part of understanding your financial circumstances. Once you’ve got a handle on how credit scores work, a financial search engine like Fiona can help you find cards that match your credit score and financial needs.
Applying for credit cards for the first time can be tough, so let Fiona match you with great options.
So, What is a “Credit Score”?
Your credit score is one of the many numbers that appear on your credit report. Your credit report does exactly what it says: it provides a report of inquiries, collections, judgements and all activity around your credit. Scores range from 300-850.
Before you even look at your score or report, you should ask yourself a few questions to assess your credit health: Do you pay bills on time? Do you pay off credit card balances in full? Do you have any delinquent accounts? If you answered ‘no’ to one or more questions, your credit may be on the lower end of the range. You can take steps to raise your credit, like making on-time payments and reducing your credit line usage.
You can verify your score by double-checking that all accounts on your report are accurate. You can also use your credit report to check if you’ve been a victim of identity theft. Ensure that the only accounts listed on your report are ones you personally opened or co-signed.
Why Does My Credit Score Matter?
Lenders use your credit score to help them determine your card terms. A higher score can help you get approved for credit cards with lower interest rates, higher credit lines or other perks and rewards.
Once you’ve pulled up your credit report, you’ll want to know where you stand among other consumers. Average credit scores vary by state, with Mississippi coming in with the lowest average credit score of 667 and Minnesota at the highest with 733.
According to Experian, the average American credit score varies by age group, with those between the ages of 20-29 having an average score of 662, while those over the age of 60 having an average score of 749. Scores between 670-739 are considered “good” scores”, with the average score of all age groups falling in that range.
Now that you have some insight on understanding your credit score and how it can impact your financial present and future, what should you do next? If you’re happy with your current score, then you’re ready to start your search for a credit card. If you’re unhappy with your credit score—don’t fret—there are some easy ways to (link: /learn/about-creditcards/easy-steps-to-improve-your-credit-score text: improve your credit)!
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