Listen Money Matters - Free Your Inner Financial Badass. All The Stuff You Should Know About Personal Finance.

Debt affects your credit score and makes life more expensive. We’ll show you the cost of debt and reasons you need a kick ass credit score. A good credit score saves you money in many ways. You don’t have to achieve the “perfect” score but having a score above 760 will go a long way towards making life cheaper. What is a Credit Score? A credit score is a number calculated using a number of factors to show how creditworthy you are. Lenders use this number to decide whether or not to lend you money, what rate of interest you will pay on that loan and in the case of credit card companies, whether or not to issue you a card and what your limit will be. Card interest rates are pre-set so your score doesn’t affect that. What Makes Up a Credit Score? There are six major components that make up your credit score. We did an in-depth article on it but to quickly re-cap, these are the factors; * Payment History: If you pay your bills on time. * Credit Utilization: How much of your available credit is being used