Question 8
Credit scores are a critical measure of financial health, and credit card use plays a huge role in shaping them. Your score is based on factors like payment history, amounts owed, length of credit history, types of credit, and new credit inquiries. Among these, payment history and utilization carry the most weight. For example, someone who pays on time but regularly maxes out their cards may still see a poor score. Scores usually range from 300 to 850, with higher numbers indicating stronger creditworthiness. Lenders use these scores to decide whether to approve loans, what interest rates to offer, and how much credit to extend. Credit card management — paying on time, keeping balances low, and using credit responsibly — is one of the best ways to build and maintain a strong score.
Which of the following has the largest impact on your credit score?
Did You Also Know...
By Wise Wallet
A backdoor Roth is a legal technique some high earners use to get Roth tax treatment by converting nondeductible IRA funds.