What does 'credit to debt ratio' refer to, and what is generally considered a good ratio to maintain?

Credit to debt ratio is the amount of credit you're using compared to your total available credit. It's best to keep it under 25%.

How does the length of your credit history affect your credit score?

A longer credit history generally leads to a higher credit score, as it provides more data for lenders to assess your borrowing behavior over time.

Credit Scores and Your Future

11th Grade•60 minutes

Learning Objective

I can explain how credit scores impact financial opportunities.

Key Concepts

Your FICO score is a three-digit number between 300 and 850 that indicates to a lender how safe it is to lend money to you.

The largest percentage of your FICO score is based on your payment history, so missing a payment is one of the worst things you can do.

To maintain a good credit score, it's important to keep your credit to debt ratio under 25% and be mindful of applying for too many new lines of credit in a short period.

Practice Questions

This lesson includes 12 practice questions to reinforce learning.

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1. What is the primary purpose of a credit score?

2. Which of the following is NOT one of the 'big three' credit reporting bureaus?

3. Explain how payment history impacts your credit score and why it is important.

...and 9 more questions

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What Goes Into Your Credit Score?

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