Prosper Academy Prosper Academy


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  • Produer: Joanes Prosper
  • Associate Producer: Dwayne Johnson
  • Writer/Talent: Nathanial Higgins
  • Director of Photography: Caroline Stucky
  • Editor: Yahor Marizou
So, what is a credit score? A credit score is a number generated by a mathematical formula that is determines your creditworthiness. It is a that lenders look at to determine how much money or credit they are going to extend to you or if they are going to extend credit or money to you. A well known measure that lenders use is called the FICO score. It is created by the Fair Isaac's Corporation and this score ranges anywhere from 300-850. Although, some have said that they've seen as high as 900. what is your score made up of? 35% is essentially how you pay your bills. Do you pay on time? Do you pay late? About 30% is made up of your capacity and amount owed. So, do you have a lot of credit being used vs. the amount of credit you have available. So, if you have that $1,000 credit card, are you using $10 dollar on it or are you using the whole $1,000 dollars. About 15% is made up of the length of your credit history. Did you recently get credit? Have you had credit for a long amount of time. About 10% is made up of your new credit. Do you have a lot of new accounts in the past 12-18 months. Do you have a lot of inquiries in the past 12-18 months. This can effect your score. number of inquiries and new accounts opened in the last 12-18 months; And lastly, about 10% is the mix of credit you have. Do you have more credit cards vs installment loans vs mortgage loans vs car loans. These are factors that determine your credit score. In short, your credit score is the number that lenders use to determine the risk they take when they extend you credit or if you borrow money from them or even the interest rate they might charge you if they extend you credit. It is important to know what's on your credit report and your FICO score because they can be very different and it can change daily.