Impel Wealth Management Moving Life Forward
Nathan Ollish CFP(R) AIF(R)
April 9, 2021

This Week from Nathan D. Ollish
CFP® CERTIFIED FINANCIAL PLANNER™ • AIF® ACCREDITED INVESTMENT FIDUCIARY

Who is Keeping Score?
Many of us know what a credit score is and know that the higher our score, the better. However, this is often the limit of knowledge for many consumers, and even more misunderstandings can come into the equation as many confuse their credit score with their credit report. So, what exactly is your credit score, and what can you do to maximize yours?
 
Your credit score is a 3-digit number used by lenders to evaluate your ability to repay debt on time. This is different from your credit report, which is a list of your credit accounts. The activity on those accounts is what is used to calculate your credit score. Your credit score is a significant factor that lenders will use when they are considering your application for a loan, mortgage, or credit card. 
 
One common misconception is that your age, income, and employment status count towards your credit score. These factors do not; however, a lender could still use them when deciding on whether to approve you for a loan.
 
There are five factors that weigh into calculating your credit score, with the top three typically making up about 80% of your total score, according to FICO. These are:
 
1) Making on time payments. (35% of total score) 
 
2) Credit usage, or how much of your available credit do you currently owe. (30% of total score)
 
3) Length of your credit history, including the age of your various accounts and how long it has been since you used those accounts. (15% of total score)
 
The remaining two factors that make up the last 20% of your score include opening too many accounts in a short time span as well as the types of accounts you have (credit cards, mortgages, car loans, etc.).
 
Finally, staying up to date on your credit score is generally a good thing. You can request your credit score through the three main credit bureaus (Experian, TransUnion and Equifax). Also, many banks and credit card companies have started to offer free credit scores if you have an account with them.
 
If you have any additional questions about credit scores or how to improve your score, the team at Impel Wealth Management is ready to answer your questions as we all keep Moving Life Forward together.  

Sincerely,

Nathan D. Ollish, CFP®, AIF®
CERTIFIED FINANCIAL PLANNER™
Financial Advisor
Is there something we can help you with? Please call me at 330.800.0182 or email me directly at jesse.hurst@impelwealth.com.
S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods. Sources: Yahoo! Finance, MarketWatch, djindexes.com, London Bullion Market Association. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.
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