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Feb 27, 2026
Understanding Your Credit ScoreSimple VersionYour credit score is like a "trust rating" that tells banks how likely you are to pay back money you borrow. Higher number = banks trust you more = you get better deals on loans.
Full ExplanationImagine you lend your friend $20. They pay you back the next day. You would lend to them again, right? Now imagine another friend who still owes you from 6 months ago. You would think twice.
Banks think the same way. Your credit score (a number from 300-850) is their way of checking if you are the "pays back on time" friend.
What affects it:- Payment history (35%) -- Do you pay bills on time?
- How much you owe (30%) -- Using less of your available credit is better.
Dinner Party Version"It is basically a trust score for borrowing money. Pay your bills on time, do not max out credit cards, and it stays high."Replace the highlighted parts with your own information.
[TOPIC]What you want explained
Example: How does a credit score work and why does it matter?
[REASON]Why you need to know this
Example: I am applying for my first apartment and they asked about my credit score
[CURRENT_KNOWLEDGE]What you already know
Example: I know it is a number and higher is better, but not how it is calculated
[BACKGROUND]A bit about yourself
Example: 25 years old, first time renting on my own, no finance background
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