im embarrassed to admit that my knowledge of how credit works is slim. so i have a few questions:
1. why do credit scores only go up a certain amount at a time, but if you don’t make a payment on time, it can plummet 50 points? (just an example)
2. What is a “credit line for cash”, and how does that work?
3. What deeply impacts your credit?
In: Other
Credit scores are a proprietary calculation of the credit reporting companies, there is no easy explanation of them. They generally reward behavior that’s statistically associated with paying your debts, like making payments on time, and punish behavior that’s associated with not paying your debts, like paying late.
The scores are not for you, they are for lenders about you. They reflect the lender’s priorities, so paying even once late is a big deal (big change) and paying on time is expected (small change).
Latest Answers