The 15 Essentials of Credit in 2023

As the world becomes more digitized, it’s increasingly important to have a good credit score. A good creditscore not only makes it easier to get a loan or credit card, but it can also help you get better interest rates and save money in the long run. Here are 15 credit facts that everyone needs to know in 2023.

Why Credit Scores Matter

Credit scores matter because they are a reflection of your creditworthiness. A good credit score tells lenders that you’re responsible with credit and more likely to repay a loan. A poor creditscore, on the other hand, suggests that you’re a higher risk and may not repay a loan. In short, having a good credit score can save you money and open up more opportunities for credit.

What is a Credit Score?

Your creditworthiness is quantified by a number known as your credit score. It ranges from 300 to 850, with a higher number indicating a better score. The most commonly used creditscore is the FICO score, which is used by 90% of lenders.

The Factors That Affect Your Credit Score

Your credit score is based on several factors, including your payment history, credit utilization, length of credit history, types of credit, and new credit inquiries. Payment history and credit utilization are the most important factors, accounting for 35% and 30% of your FICO score, respectively.

How to Check Your Credit Score

You can check your credit score for free once a year from each of the three credit bureaus (Equifax, Experian, and TransUnion) at You can also use a credit monitoring service or sign up for a free creditscore from websites like Credit Karma or Credit Sesame.

The Importance of Monitoring Your Credit Score

Monitoring your credit score is important because it allows you to keep track of changes and detect errors or fraud. You can set up alerts to notify you of changes to your credit report, which can help you catch mistakes or fraudulent activity early.

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How to Improve Your Credit Score

Improving your creditscore takes time, but there are several steps you can take to start building a better score. These include paying your bills on time, keeping your credit utilization low, and avoiding opening too many new accounts at once.

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The Impact of Late Payments

One’s credit rating might take a serious hit in the event of late payments. Even one late payment can lower your score, and the longer the payment is overdue, the more it will hurt your score.

What to Do If You Miss a Payment

If you miss a payment, the best thing you can do is catch up on the payment as soon as possible. You may also be able to work out a payment plan with the lender to avoid further damage to your credit score.

The Benefits of a Good Credit Score

Having a good creditscore comes with several benefits, including lower interest rates on loans and credit cards, higher credit limits, and better approval odds for loans and credit applications. It can also make it easier to rent an apartment, get a job, and even save money on insurance premiums.

How to Build Credit

If you have a limited credit history or a poor credit score, there are several ways to start building credit. These include getting a secured credit card, becoming an authorized user on someone else’s credit card, or taking out a credit-builder loan.

What Makes a Credit Inquiry “Hard” or “Soft”?

Hard credit inquiries are far more severe than mild ones. A soft inquiry, such as when you check your own credit score, does not affect your creditscore. A hard inquiry, such as when you apply for a loan or credit card, can lower your score temporarily.

The Length of Time Unfavorable Information Remains on Your Credit Report

Negative information, such as late payments or collections accounts, can stay on your credit report for up to seven years. It takes up to 10 years for a bankruptcy to drop off a credit record. However, the impact of negative information on your score will diminish over time.

What Occurs When a Credit Card Account Is Deleted

Closing a credit card account can affect your credit score in a few ways. It can increase your credit utilization, which can lower your score. It can also shorten your credit history, which can also lower your score.

The Importance of Credit Utilization

Credit usage measures how much of your available credit you are really using. It’s important to keep your credit utilization low, ideally below 30%, to avoid negatively impacting your credit score.

How to Avoid Credit Card Fraud

Credit card fraud is a significant issue, but there are things you can do to avoid being a victim. These include monitoring your accounts regularly, using secure passwords, avoiding phishing scams, and keeping your card information safe.


Understanding credit is more important than ever in 2023. Knowing your credit score, monitoring your credit report, and taking steps to improve your credit can help you save money and open up more opportunities for credit in the future.


Can I get a loan with a low credit score?

It may be possible, but you’ll likely have higher interest rates and fewer options.

How often should I check my credit score?

It’s a good idea to check it at least once a year, and more often if you’re actively trying to improve your score.

How long does it take to improve your credit score?

It depends on your starting point and the steps you take to improve your score, but it can take several months or even years.

Can I dispute errors on my credit report?

Errors on your credit report can be disputed by calling the reporting agency and providing supporting documentation.

What should I do if I suspect credit card fraud?

You can protect yourself from credit card fraud by monitoring your accounts regularly, using secure passwords, and avoiding phishing scams.


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