As the days grow shorter and autumn settles in, it’s a good time to shine a light on a topic that can feel
mysterious: your credit score. For many, credit can feel confusing or even intimidating, but
understanding how it works and why it matters can be an important step toward strengthening your
financial health journey.

How Your Credit Score Impacts Your Financial Journey
Your credit score is a three-digit number used by lenders, landlords, insurance companies, mobile phone
providers, and financial institutions to assess your reliability. A higher score can help you qualify for
lower interest rates and better loan terms, saving you money in interest and making it easier to achieve
major financial goals such as buying a home or car.
Establishing good credit means building a record of responsible usage. Using your credit card and paying
your bill on time demonstrates financial responsibility to lenders. On the other hand, missing payment
deadlines or not meeting the minimum amount due can negatively impact your score.

Understanding the Factors Behind Your Credit Score
Credit scores typically range from 300 to 850. The better your score, the more options you may have
with lenders. Here’s what usually influences your score:
Payment History: Consistently paying bills on time has a positive impact, while late or missed
payments can lower your score.
Credit Utilization: Using a smaller portion of your total available credit is better for your score;
high balances relative to your total credit limits can be a negative factor.
Total Debt: Lower overall debt is viewed more favorably, while carrying high debt can reduce
your score.
Types of Credit Accounts: Having a mix of credit accounts, such as credit cards, auto loans, and
mortgages, can strengthen your score.
Length of Credit History: A longer track record of responsible credit use contributes positively to
your score.
Recent Credit Applications: Applying for new credit can temporarily lower your score.
Credit Inquiries. Soft inquiries, like checking your own credit or receiving pre-approved offers,
don’t affect your score. Hard inquiries, such as applying for a loan or credit card, may lower your
score slightly, but the impact fades over time and drops off your report after two years.

If your credit score is on the lower end, don’t worry—there are steps you can take to help improve it.

Credit Smart Habits for
Pay your bills on time. Payment history is an important factor when it comes to calculating your
credit score. If you struggle with meeting payment deadlines, consider setting reminders or
enrolling in autopay.

Pay down your debt. Your credit utilization—meaning the size of your card balance—is the
second biggest factor in most credit scoring models. Create a plan to pay down high-interest
debt first.

Monitor your credit with Chase Credit Journey®. Regularly checking your credit report can help
you spot areas of improvement and fix errors. Chase Credit Journey is a free tool that lets you
monitor your score without impacting it, and provides alerts if your personal information is
exposed in a data breach. It’s free for everyone, no Chase account required.

Turning Credit Concerns into Financial Wins
Building credit doesn’t have to be spooky and mysterious. With patience and smart financial habits, you
can improve your score and unlock financial opportunities. This fall, take steps to understand and
strengthen your credit.