2. How Credit Scoring Works

The first thing you need to know about your credit score is that you don’t have a credit score: You have many, and they change all the time.

Credit scores are designed to be a snapshot of your credit picture—typically, the picture contained in your credit report. New information is constantly being added to your report, and old information is being deleted. Those changes affect your score.

That can be good news or bad news. The good news is that if you have a bad score now, you’re not stuck with it forever. You can do a lot to improve your situation and make yourself more creditworthy in lenders’ eyes.

The bad news is that you can’t rest on your laurels. When you have a good score, you need to constantly monitor your ...

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