Chapter 03 — Money & Finance
How does a credit score actually work?
Roughly: payment history (35%), how much of your available credit you use (30%), length of history (15%), credit mix (10%), new applications (10%). Pay on time, use under 30% of your limit, don't close old cards.
Follow-up questions
Will checking my score hurt it?
No — checking your own score is a 'soft' pull. Only lenders' 'hard' pulls ding it, and only briefly.
How fast can I rebuild credit?
Six months of perfect on-time payments visibly moves the needle. A year transforms it.
What is a good credit score?
In the US (FICO/Vantage): 670+ is good, 740+ is very good, 800+ is excellent. Below 580 is poor and limits what you can borrow.
Does checking my credit score lower it?
No. Checking your own is a soft enquiry with no effect. Only lender hard enquiries have a small, temporary impact.
How long does negative information stay on file?
Typically six years in the UK and seven in the US for most delinquencies, with bankruptcies sometimes longer.
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