Credit score
A number, usually from 300 to 850, that tells lenders how likely you are to pay back what you borrow. Paying bills on time is the biggest factor.
In the news
How “credit score” came up in recent issues.
- Oct 21Netflix earned more than expected, but its stock still fell
“That's why your credit score matters.”
Practice it
- Worksheet: Credit cards and credit scoresHow credit card interest works, why the minimum payment is a trap, and what builds a credit score.
- Worksheet: Car loans: the real costHow the interest rate and loan length change what a car really costs.
Learn the bigger idea
- Credit cards and credit scores, explainedThe three-digit number that follows you for years, and how a credit card can help it or wreck it.
- Loans and debt, explainedHow borrowing for a car, college or a house works, and why the monthly payment isn't the real price.
Related words
- Credit report
- A record of how you've borrowed and paid back money. You can check yours for free at AnnualCreditReport.com.
- Credit utilization
- How much of your available credit you're using. Using a small share of your credit limit is better for your score.
- Credit card
- A card that lets you borrow money to pay for things. If you don't pay the full bill each month, you're charged interest on what's left.
- APR
- Annual percentage rate: the yearly cost of borrowing money, shown as a percent. It includes interest and some fees. Many credit cards charge more than 20%.
- Minimum payment
- The smallest amount you can pay on a credit card bill without a late fee. Paying only the minimum can keep you in debt for years.
- Loan term
- How long you have to pay back a loan, like 60 months for a car loan.
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