You’ve heard of credit scores. Maybe you’ve even checked yours. But do you really understand what they are and how they work?

I’m Adam Levin and this is the Wall Street Journal credit minute.

Credit scores are like a crystal ball for lenders. By looking at how people have handled credit in the past they try to predict how they’re likely to handle it in the future.

The five main factors they look at are payment history, debt, new credit, the age of accounts and the mix of accounts.

Three things you need to know about credit scores:

  • There are lots of different ones, so don’t get too hung up on a single number.
  • Your credit score can change as fast as the information in your reports change, and
  • The score is only as good as the information used to create it.

That’s why it’s important to check your credit reports, which you can do once a year at You won’t get a free credit score there, however, so you’ll also want to check out where you can get your scores for free.

I’m Adam Levin. Come visit us at and learn how to take control of your credit.