What Is Credit And Why It Matters

If you’ve ever applied for an apartment, a loan, or even a phone plan, your credit score probably came up. But what exactly is it - and why does it matter so much?

Your credit score is a number between 300 and 850 that shows lenders and landlords how reliable you are when it comes to paying bills or managing debt. Think of it like a financial trust score : the higher your score, the more confident people are in your ability to handle money responsibly.

Even if you’re renting, your credit score plays a big role in your housing experience. A strong score can help you:

      ▪︎   Qualify for better apartments with less hassle
      ▪︎   Pay a lower security deposit
      ▪︎   Save money over time by getting approved for lower-interest loans
      ▪︎   Be more competitive if multiple people apply for the same unit

But here’s what most people don’t realize: your credit score isn’t just about loans or credit cards. It’s based on five key areas:

      ▪︎   Payment history - Do you pay your bills on time?
      ▪︎   Amount owed - Are you using most of your credit, or only a little?
      ▪︎   Credit history length - How long have you had credit accounts?
      ▪︎   Credit mix - Do you have a mis of loans and credit cards?
      ▪︎   New credit - Have you applied for a lot of credit recently?

These categories aren’t weighted equally: payment history and credit utilization make up about two-thirds of your score, so focusing there can lead to the fastest improvements.

If you’ve never checked your credit score, you’re not alone. But getting a clear picture of your credit is the first step to improving it—and opening more doors for yourself down the road. 

Federal law lets you get a free credit report every year from each major bureau (Experian, Equifax, and TransUnion). Start at AnnualCreditReport.com the only official site for free reports.

Credit score not what you'd like it to be? 

It's crucial to set up credit tracking and alerts to stay aware of changes and improvements. You can do this for free on Oro's website with our Credit Tracking Feature. You can check your score, run simulations, see what’s helping - or hurting - your current credit score, and make educated decisions for the future.

Log in here to start tracking your score now!