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Stesso

Understand Credit Score Fundamentals

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Money Monday credit score

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What happens here

The video begins by introducing the concept of a credit score and highlights a common misconception that people often focus on less impactful elements. It visually presents five wooden blocks, each labeled with a component of a credit score and its percentage contribution. These factors are Payment History (35%), Credit Utilization (30%), Length of Credit History (15%), Credit Mix (10%), and New Credit (10%). This initial overview establishes the hierarchy and importance of each factor before diving into specifics.

Goal: Identify and recognize the five core components of a credit score and their respective weightings.

Tools and materials

  • Wooden Blocks with Labels DIY/Handmade — Representing credit score factors and percentages visually

What they say

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Most people have no idea what actually makes up a credit score. Let's get after it. First one, makes up 10% of your credit score. You don't need a bunch of store credit cards because they offer you 10% of that one-time purchase when you're at Home Depot. Just one credit card, get it over with. The next 10% is credit mix. Don't think you need to go out and buy a new truck, you need to go buy a new ATV, you have to have that payment. Absolutely not. It's only 10% of your credit score, just

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