Credit Scores Explained in (Exactly) 250 Words


What credit scores are: Three-digit numbers expressing the likelihood you’ll repay someone who lets you use their money (like a loan or credit card).

Who has a credit score: People who have been listed on an account that was reported to any of the three credit bureaus: Equifax, Experian and TransUnion. An account can be a student loan, car loan, credit card, credit-builder loan or maybe rent. It represents something you are obligated to pay.

Where the number comes from: Data is collected by the credit bureaus, which get the information from lenders, credit card issuers and public records. Then it is weighted to produce a score, typically on a 300 to 850 range. Higher is better. There are hundreds of scoring models, so most consumers have many credit scores.

How do I get started?

  • If someone with good credit makes you an authorized user on an account that’s reported, that can help.
  • Student loans and sometimes car loans can be relatively easy to qualify for.
  • Credit-builder loans and secured credit cards are made for people building credit or re-establishing credit.

What should I do to boost my credit?

  • Pay all bills on time, every time.
  • Use your credit cards lightly — that is, don’t use more than 30% of your credit limit on any card.
  • Keep old accounts open unless you have a good reason to close them (like high fees).
  • Apply for credit sparingly.
  • Consider having both installment (level monthly payments for a set period) and credit cards.

The article Credit Scores Explained in (Exactly) 250 Words originally appeared on NerdWallet.


Understanding your credit score doesn’t have to be difficult. For additional information regarding credit scores, click here.

Members 1st is here to help you to achieve your financial goals and assist you through all of life’s moments and milestones. If you have any questions, please call Customer Service at (800) 237-7288, visit our website, or visit one of our various branch locations.

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