Last week, we kicked off our three-part series on understanding credit scores and why they’re so important. Credit can often be overlooked, and navigating it isn’t always easy.

This morning, we’re joined once again by financial expert Barry Bigelow to help explain how credit scores are calculated.

“There are key categories,” Bigelow says. “The biggest one is payment history. The key is avoiding late payments over 30 days because that’s when you can get reported to the credit bureaus. Make sure you’re making payments consistently.”

If you’re struggling to make a payment, communication is crucial. “Reach out to your lender,” Barry advises. “It shows you’re proactive. They may be more willing to work with you and could even avoid reporting a late payment.”

Several factors can affect your score, and sometimes, surprising things, like paying off a credit card can actually lower it. “You might lose a type of credit,” Bigelow explains. “A diversified credit portfolio is important. Without it, your score may drop.”

Credit scores can seem confusing, but understanding the key components makes them easier to manage.

Tune in next week for the final part of our Money Matters series, where Barry will share practical strategies to improve a less-than-perfect credit score.