What is a credit score?

What is a credit score? How is my credit score calculated?

A credit score is a number that reflects the information in your credit report. The score summarizes your credit history and helps lenders predict how likely you will repay a loan and make payments when they are due. Lenders may use credit scores in deciding whether to grant you credit, what terms you are offered or the rate you will pay on a loan.

Information used to calculate your credit score can include:

• the number and type of accounts you have (credit cards, auto loans, mortgages, etc.);
• whether you pay your bills on time;
• how much available credit you are currently using;
• whether you have any collection actions against you;
• the amount of your outstanding debt; and
• the age of your accounts.

How is CEO helping me to build my credit score?

If you have applied for our credit-building loan, you might be wondering how that could improve your credit score. CEO’s Credit Building Ladder is a series of three installment loans that help borrowers build credit over several years. If you complete the Credit Building Ladder, making all payments on time, you will benefit in several ways on your credit score:

• You will show 34 on-time monthly payments on your credit history
• You will have three (3) installment loans opened and paid-in-full
• You will not have any hard inquiries on your credit reports

What if my credit score is not improving?

While our Credit Building Ladder loan program exists to help you build credit, a non-payment may harm your credit score. Furthermore, the Credit Building loan is just one of the financial tools to help you get started repairing or building positive change in your score. If you have many late payments, outstanding debt, or collection action against you, your loan with us will only have a minimal impact on improving your credit score.

How can I improve my credit score?

To find out steps you can take to improve your credit score, read the Federal Reserve’s 5 Tips for Improving Your Credit Score - https://www.federalreserve.gov/pubs/creditscore/creditscoretips_2.pdf

You can also learn more about Credit Reports and Credit Scores from this article published by the Board of Governors of the Federal Reserve System - https://www.federalreserve.gov/creditreports/pdf/credit_reports_scores_2.pdf

Lastly, please check in with your financial coach since they can guide you on taking the proper steps in the credit-building or repairing journey.