Your credit score might seem like just a random three-digit number, but in reality, it has the power to shape major parts of your financial life. From getting approved for a credit card to securing a loan for your dream car or even renting an apartment, your credit score plays a crucial role.
In this blog, we will explore what a credit score is, why it matters, and the practical steps you can take to improve it. We will also answer some of the most common questions you might have about credit scores.
And of course, we will also show you how tools like Jeton Wallet and Jeton Card can help you stay on top of your finances while working toward a healthier credit profile. Let’s start by understanding the fundamentals of credit scores!
What Is a Credit Score?
A credit score is a 3-digit number (ranging from 300 to 850) that shows you how likely you are to be accepted for credit. It is based on your credit report, which is a record of how you have handled credit in the past. Think of it as your financial report card.
- A higher score means lenders see you as a lower-risk borrower.
- A lower score means lenders may hesitate to approve you, or they might charge higher interest rates.
When you apply for any type of credit, such as a credit card or a money loan, lenders will naturally want to know what kind of risk they would be taking by loaning you the money.
In order to make a decision, lenders will ask for a copy of your credit report—and, when they do this, they often buy a credit score that’s based on the information contained in your credit report.
Your score is based on your credit report, which records your past financial behavior, such as:
- Whether you pay bills on time
- How much debt do you have?
- How long have you been using credit?
- The types of credit you use
The credit score is a visual representation of the summary of that report.
Daily life example: Imagine you are applying for a mobile phone contract. The provider will often run a quick credit check. If your score is strong, you are likely to get approved instantly. If not, you may be asked for a higher deposit—or get declined.
What Is a Good Credit Score?
Your credit score does not have a specific number. The FICO Scores have a range of 300 to 850. Obviously, the higher the number, the lower your risk is as a borrower. Here is a general guide based on the FICO scale:
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300–579: Poor—may struggle to get approved.
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580 – 669: Fair—some approvals possible, often with higher rates
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670 – 739: Good—lenders generally see you as reliable
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740 – 799: Very good—strong chance of approvals with better terms
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800 – 850: Excellent—top-tier financial health
In daily life terms, if your score is “Good” or higher, you are more likely to get approved for a credit card with perks or qualify for a mortgage at a lower interest rate.
What Is the Maximum Credit Score?
Most credit scoring systems top out at 850. Very few people actually hit that number, but don’t worry—you don’t need a maximum credit score. Anything above 760 is typically considered excellent and will get you the best rates and approvals.
How to Check Credit Score?
Checking your credit score has never been easier. Depending on your country, you can:
- Request a free annual credit report from agencies.
- Use banking apps that show your score for free.
- Sign up with credit monitoring platforms.
The positive news is that checking your score (a “soft inquiry”) won’t hurt your credit rating.
How Much Credit Score Is Required for a Credit Card?
Every lender has different requirements, but in general:
- Poor/Fair (below 670): You may only qualify for secured cards or basic cards.
- Good (670+): You will likely get approved for standard cards.
- Very Good/Excellent (740+): You will have access to premium cards with rewards, perks, and lower fees.
So, while you can still get a card with a lower credit score, the higher your score, the better your options.
Does Closing a Credit Card Affect Credit Score?
Yes, it can—but not always in the way you think. When you close a card, you might:
- Reduce your total available credit, which could increase your credit utilization ratio (bad for your score).
- Shorten your average credit history, which can also lower your score.
Example: If you had two cards—one with a $5,000 limit and one with $10,000—and you close the $10,000 card, suddenly your credit limit is cut in half. If you still carry balances, your utilization ratio spikes, lowering your score.
Does Increasing Credit Limit Affect Credit Score?
It can actually help—if you use it wisely. Here is why: your credit utilization ratio (the percentage of credit you are using compared to what’s available) constitutes a big part of your score. The lower the ratio, the better.
If your credit limit rises but your spending stays the same, your utilization drops, which may raise your score.
Does Minimum Payment Affect Credit Score?
Making only the minimum payment won’t hurt your credit score directly—as long as you pay on time. But it is a dangerous habit. Why? Because:
- You will accumulate interest, making it harder to pay off debt.
- Your balances remain high, which could affect your utilization ratio.
Daily life example: It is like paying just the interest on your mortgage but never touching the actual loan. Over time, the debt barely shrinks.
How to Increase Credit Score?
Here’s the truth: improving your credit score isn’t a sprint—it is a marathon. It takes consistent effort over time. But small, steady steps can make a big difference. There are many things you can do to help improve your score, but it takes time and patience.
Here are some beneficial ways to increase your credit score:
- Register to vote. By registering to vote, you make it easier for lenders to verify your identity. Make sure you register again if you move houses.
- Pay on time. From credit to mortgages, making payments on time is the best way to avoid black marks. It tells lenders that you are a safe and sensible borrower, and that makes you less of a risk. Timely payments are the single biggest factor.
- Build up your credit history. If you have little or no credit history, it can be difficult for companies to score you, which can result in a lower credit score. Start small if you are new—even a low-limit card can help.
- Only borrow what you know you can afford. If you get into trouble with debt, this will show on your credit report and will damage your score. Try to use less than 30% of your available credit.
- Check for errors in the fraudulent activity. Before applying for any form of credit, take the time to go through your credit file for any mistakes or fraudulent activity. An incorrect address or any mistakes in personal information could impact your chances of being approved.
- Don’t apply for too much credit at once. Each application leaves a “hard inquiry,” which can hurt your score.
And last but not least, the more information you provide, the more reliable you will look to lenders. This is why it is important to start building your credit history early. Think of it like building a reputation. Just as trust in real life takes time to earn, so does financial trust.
Wrapping Up
Your credit score doesn’t just decide whether you can get a new credit card—it impacts your lifestyle, financial opportunities, and peace of mind. Understanding how it works and taking simple daily actions to improve it can transform your financial health in the long run.
And while you are working on improving your credit score, Jeton makes managing money smarter and simpler:
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With the Jeton Wallet, you can track your spending in real-time, set budgets, and safeguard your funds.
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With the Jeton Card, you can shop globally, enjoy contactless payments, and stay in control of your finances.
Are you prepared to take charge of your financial future? We invite you to open your free Jeton account today, obtain your Jeton Card, and manage your finances more effectively. Download the Jeton app from the App Store or Google Play now and start your journey toward financial freedom!
