While your credit reports are simply a track record of your payment history—no judgments—your credit score is more akin to a school GPA. It’s a cumulative number that measures your success relative to others, in this case grading you as a credit-worthy individual. Improving your credit score starts off with knowing the different components that make up your credit score.
The most widely used score, from a company called FICO, ranges from 300 to 850. The higher the number, the better. The credit score is based on 5 different components:
1. Payment History
2. Credit Utilization
3. Length of Credit History
4. New Credit
5. Credit Mix
This video will explain the weight and importance of each component.