WHAT IS A CREDIT SCORE?
Quite simply, it's a three-digit number that helps financial institutions decide how well and how often you pay back your debts. When getting approved for things like credit cards, auto loans, mortgages, and more, your credit score determines your 'creditworthiness,' or how good of an investment you are for the financial institution in question. A lower credit score means you're less trustworthy with you money and a riskier investment, because there's no guarantee the institution will get its money back. 

So what, exactly, goes into calculating your credit score? The short answer is 'lots of things,' but the fact of the matter is that most credit scores are determined by six main factors
1. PAYING BILLS ON TIME
When you take out a loan, you're required to pay that loan back in the form of monthly payments. If you always pay on time and you always pay above the minimum, your score will be significantly better than someone who pays the bare minimum and is always late.  
2. CREDIT CARD USE
Have you ever considered how many credit cards you have, and how often you use them? It's good practice to only use a few credit cards and not accumulate large amounts of debt. Someone who pays their credit card debt off every month will have a higher credit score.  
3. HOW LONG YOU'VE HAD CREDIT
Just like jobs prefer to hire potential employees who have more experience in a field, so too do financial institutions prefer to loan money to people who have a longer (positive) credit history. Even if you are meticulous about budgeting and paying off debt but you've only had a credit card for a few months, your credit score will be lower than someone with several years under their belt.  
4. NUMBER OF CREDIT ACCOUNTS
People with more lines of credit open, such as auto loans, mortgages, student loans, and more, will have a higher credit score, because financial institutions will recognize that these individuals have been approved for credit by several other institutions in the past.  
5. COLLECTIONS, FORECLOSURES, AND BANKRUPTCIES
This one's obvious -- if you've suffered a lot of hardships from not being able to pay off debt, such as having vehicles collected, houses foreclosed, and having to file for bankruptcy, financial institutions will be significantly less likely to trust you.  
6. HARD CREDIT INQUIRIES
A hard credit inquiry is when a financial institution checks your credit when considering whether to approve you for a loan or a credit account. These inquiries cause your credit score to decrease, so it's best to avoid applying for credit at multiple places at once. 
It's important to have a good credit score to be able to finance your new car. 

At Bill Walsh Streator, we are glad to uncover this mystery and share what factors impact your credit score so that you'll be able to improve your score and prepare for financing your next vehicle.