How Do Credit Scores Calculate My Worth?

Your credit score is like a report card for money. It tells people if you are good at keeping promises. When you borrow money, the bank watches what you do. Do you pay back on time? Is your pocket too full of debt?

Banks look at three big things. First, they check payment history. If you always pay when the bill comes, you get extra points. Second, they count how much space is left in your credit limit. Third, they see how long you have had money accounts.

A high score means you are trustworthy. A low score means people think you might forget to pay. This number changes what you can buy and how much extra fee you must pay.