Financial Fitness: Credit Scores


Recently, FemmeTek heard a lecture about financial stability and realized some shocking things: Many University students tend not to pay attention to things like financial stability during their first couple of years at school.

This really should not be the case. So, based on the lecture we heard recently, we decided to start a series we like to call Financial Fitness. This first installment of the series is going to be all about Credit Scores.

Credit Scores: 

Your credit score starts being built as soon as you turn 18. It doesn't happen when you get your first credit card, rather, it happens when you become an adult.

Here are some basic things we learned recently about credit scores that you might find a bit helpful:

  1. Every adult has a credit score. The score ranges from 200 - 800 with 800 being the perfect score.
  2. There are three major credit reporting bureaus:
    1. Experian
    2. Transunion
    3. Equifax
  3. Your FICO Score is the most generic score you have.
  4. Your FICO Score is made up of (mostly):
    1. Your payment history: Whether or not you have paid your bills on time
    2. Credit Utilization: How much of your credit available to you are you using?
    3. Length of your Credit History: Longer the better.
    4. Types of credit used: Car Loans, Student Loans, Home loans etc.
    5. Credit Inquiries:
      1. Two Types of Credit Inquiries:
        1. Soft Inquiries: phone, electric, insurance. These do not harm your credit score.
        2. Hard Inquiries: Car loans, Mortgage loan, credit cards. These stay on your history for 2 years and do hurt your score so the fewer the better.
    6. There are more parts to your credit score, but they are not publicly available so no one really knows.


So what does your credit score do and why is it so important? 

Your credit score is way allows you to be able to take the new car off of the lot at the dealership and gives you the chance to buy the new and expensive piece of clothing you've always wanted ( Christian Louboutin Shoes anyone?).

Here are some important things you should know about what your credit score does for you:

  1. Determines your eligibility to receive loans and determines how long those loans are going to be.
  2. Lower your credit score, the higher your interest rate, and the longer it will take you to pay off your loan.
  3. If you have poor credit you are typically forced to obtain credit in the 'sub-prime' market where the interest rates can be as high as 15-20% for car loans.
  4. A lot of employers check your credit history so having a good credit score is important to show that you are financially stable and responsible.

What you can do to protect your Credit Score: 

  1. Check your credit score FOR FREE.
  2. Go to to check your credit score for free once a year.
  3. Be sure to check all of your reports with all three agencies.
  4. Dispute any inaccurate information on your report.
  5. Pay all your bills online.