How your credit score is built and what moves it
Process map by Brian. 14 steps, 2 layers. Tags: personal finance, credit, money.
- You: Open a credit card or take out a loan
- Lenders: Report the account to the credit bureaus every month
- Credit bureaus: Build a file of every account and payment
- Scoring model: Score the file from 300 to 850
- You: Pay on time and keep balances low?
- Scoring model: The score rises over the years
- You: Apply for a car loan or a mortgage
- Lenders: Pull the score and set the interest rate
- You: A higher score means a lower rate and less interest paid
- Scoring model: Late payments and high balances pull it down