What is a credit score?
Think of a credit score as a grade for how responsible you are with money. Just like in school, you get a better school report if you do your homework and show up on time. Having a good credit score is like having a great report card for money. It can help you get loans for important things like a car or a house later on.Â
Companies (banks, stores, credit card providers) will use your credit score, or credit rating, to decide whether or not to offer you things like credit cards, loans, mortgages or services. Normally, the higher the number the better.Â
Three top tips
1. Pay on time
Imagine your credit score is like a report card, and paying your bills on time is like getting good grades in class or always completing your homework on time. When you pay your phone bill or any other bills on time, you earn points and can improve your credit score.
2. Use different money skills
Just like how doing different activities helps you learn, using different money skills helps your credit score. It's like playing football, painting, and solving puzzles to develop a range of skills. Using credit cards, paying back loans, and even having a part-time job, all show you can handle different money situations.
3. Check your credit score
Did you know you can check your credit score for free? You can check your credit report as often as you like and it won't affect your score. It's a good idea to check your report before applying to borrow money to ensure there aren't any mistakes.
