This Week on Liz$plaining: Everything You Need to Know About Your Credit Score

published Jul 9, 2019
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Welcome (back!) to Liz$plaining, Apartment Therapy’s new personal finance series for real people. Last week in our first episode, I explained expert-approved tips and tricks on raising your credit score in 30 days, which is great if you have a deadline like a mortgage approval or apartment application looming on the horizon.

But what about us everyday folk? We don’t really have to think about our credit scores unless we’re looking to rent an apartment or get a new credit card… right? Wrong! This is the topic I delve into for this week’s episode of Liz$plaining: What You Need to Know About Your Credit Score (and Why!). You can watch the 12-minute episode above. In it, I explain how your credit score is calculated, the differences between credit bureaus and scores, and where down the line all this info might come in handy.

Like many, I didn’t really think about my credit score all that much before this job. Yes, I knew what my credit score was and I knew that not paying my bills would put it in jeopardy, but I didn’t really understand how it was calculated or what it could do for me. Credit scores seemed to operate in another, more boring sphere of the world I had no interest in understanding. You know, the portion of the world controlled by people who put their scores in their dating profiles, evangelize Bitcoin, hoard credit card points, and think luxury apartment buildings were the height of interior design. I’d much rather spend my time trying to get my friends to rewatch GIRLS with me or listening to Damon Daunno pronounce the word “bird” on the 2019 Oklahoma! revival soundtrack.

But as I learned about credit scores, I found that I was completely misguided. Caring about your credit score doesn’t make you boring–it makes you responsible and dare I say, interesting! Not understanding how it’s calculated or those teeny tiny differences between credit bureaus and scoring systems can cost you money and opportunities down the line.

Sure, some people disregard credit because they find debt irresponsible and operate under the motto “cash is king.” (If you’re one of those people, I’d urge you to listen to this wonderful episode of On the Media about the history of money and how the world transitioned to a credit-based economy in the late 20th century!) Even if credit isn’t a large part of your financial plan, I think getting to know the system is still important, since you never know what the future holds.

Some particularly mind-blowing facts I learned about credit scores in the past year? Here’s just a short list:

  • You don’t just have one credit score.
  • FICO scores (what 90 percent of lenders use!) are a relatively new thing! In fact, they’re the same age as Taylor Swift!
  • Your credit report doesn’t have your credit score.
  • Seemingly great financial decisions like paying off your student loans or only having one credit card could actually hurt your credit score.
  • No one really needs a perfect credit score of 850!
  • Student loans have actually helped Millennial credit scores because they’re the same type of credit as mortgages.

Hungry for more? Watch the episode above and, as always, tell me what you think in the comments below. I loved interacting with you last week and was so excited to hear about your excitement for the series. As always, if there are any topics you’d like me to cover in the future, let me know!

Liz Steelman
Real Estate Editor, Apartment Therapy

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