Learning the basics of finance can be intimidating– whether you’re a fresh-face high school grad, or a 30-something who relies solely on credit cards. Therefore, the concept of a credit score can be confusing to some. Even the most money-savvy of us probably don’t know exactly what can affect it and what doesn’t. You’re just told: Pay your bills on time and don’t max out any cards. But what else can hurt it? What DOESN’T hurt it? This post by Guy Contaldi at My City Real Estate Guy is extremely helpful. Here are a few things that do NOT affect your credit score:

-How much money you make.

-Whether or not you have a job

-How much money you have in the bank.

-Whether or not you resolve a balance.

-Whether or not your home is underwater.

Photo Credit: David Bayer 

Credit cards usually get a pretty bad rap, especially if they are misused. They can lead to crippling amounts of debt and even bankruptcy if abused. However, to their “credit,” they CAN be used responsibly and be put to work for you. One often overlooked feature of credit cards are the many “benefits” that come with them (but are rarely actually used). These benefits can help a lot any time you need some extra cash (for example, around the holidays). Jenna Lee at Credit Karma has a few ways that credit cards can actually help you this holiday season:

Purchase Protection:  guard eligible purchases against accidental damage or theft for a certain amount of days from the date of purchase

Price Protection: Like price matching at stores, only your credit card will cover the difference if you find something cheaper elsewhere

Unique Experiences: With many cards, you can use your bonus points to purchase tons of experiences, from VIP access at must-see events, to culinary experiences.

Photo Credit: Images of Money 

One of the most embarrassing things that we’ve all had to face is the dreaded “declined” card. It can be humiliating or even frightening if you aren’t sure exactly WHY you were declined. Did you already reach your limit? Did you forget to pay a bill? Is your credit score plummeting rapidly because of it?? Is someone trying to steal your identity?!? The mind can run wild and easily jump to the worst case scenario. But, it happens to everyone at one time or another, and knowing why is a huge step in not freaking out over it. Plus, if you know the possible reasons for decline, it makes it much easier to avoid. Bill Hardekopf at The Dollar Stretcher has compiled this list of the most common reasons why cards are declined and how to prevent each of them:

You have exceeded your credit limit. If you are unsure of how much money you have left to spend, check the “available balance” online or call the number on the back of your card. 

You have made a suspicious charge. This can happen if you shop in an unusual place, have an high number of transactions in one day, make a very large purchase, or try to withdraw a lot of money from an ATM.

You have missed a card payment. 

Your card will be declined if it is expired. Check the date on the front of the card and see if it is still usable.

Photo Credit: Stock Monkeys 

When I was in high school, the most valuable class I ever took was called Personal Finance. My teacher was brilliant, and taught us how to create budgets, write checks, balance our checkbooks, create savings plans, invest our money for retirement, the importance of credit scores, and even how to dress appropriately for a job interview and how to put together a resume. While other classes DO teach you important life skills like logic, reasoning, critical thinking, and writing, Personal Finance helped me the most with the tough transition into adulthood. I still use the practical skills I learned in that class every single day. That’s why I’m horrified that it was an optional elective. So many young adults entering college and the workforce are completely clueless on how to manage their money. If I hadn’t taken that class, I’d have no idea what a credit score even was, much less things like IRAs, CD accounts, and compound interest. This post by Jim Wang at US News is for those of you who weren’t as lucky as I was:

Oftentimes, when someone pulls your report they only get your FICO credit score.

I recommend one that promises to give you an official FICO credit score, not a credit bureau score.

If you don’t go with Fair Isaac, choose one associated with one of the credit bureaus (Equifax, Experian, TransUnion). I don’t recommend signing up for these programs for no reason. If you aren’t planning on getting a loan, I wouldn’t worry about it. Checking your credit report annually is good enough and already more than what most people are doing

Photo Credit: Casey Konstantin