Your credit scores are generated from a complicated scoring algorithm that takes all of the information in your credit reports and summarizes it into an easy-to-read three digit number. This three digit number helps lenders assess your credit risk and predict how likely you are to pay back a credit obligation– on time. In simpler terms, your credit score is your credit report’s grade, and you want this grade to be as high as possible.
However, before you can achieve a high score, it helps to know what factors are used to determine this three digit number. We sent Farnoosh Torabi, Credit.com Money Expert, out on the streets of New York to ask consumers if they know how their credit scores are calculated. Watch the clip to hear Farnoosh break it all down with easy-to-understand tips that will help you keep your scores in tip-top shape.