31 Oct What’s Your Number? Some Facts about Credit Scores.

Your credit score (sometimes referred to your FICO score) is basically a snapshot number that financial institutions use to determine how likely you are to repay a debt. The higher the number, the better the score. A great credit score will result in lower interest rates which can save you significant amounts of money over time.

If your credit score is low, you will be more likely to be passed over by lenders, insurers and even employers. You will also be charged higher interest by those who are willing to lend.

Credit scores are based on your credit history. Your salary, marital status, job history and education do not affect it at all. Since your score is always fluctuating, the simplest way to build and/or maintain a good credit score is by being responsible with your finances.

Five Tips to Build a Better Score*:

Tip 1: Know Your Score & Your Credit Report

You can check your credit reports at no cost with each of the 3 credit reporting agencies annually. Visit www.annual creditreport.com and request a copy every 4 months, each time pulling from a different agency. To get your true FICO score, you would normally have to pay for it at myfico.com.

As a KEMBA member, we will pull your credit report and review its contents as well your score for you at no charge.

Tip 2: Pay Your Bills on Time

Past due payments affect your score in a negative way and payment history is the single largest factor in determining your credit score.

MyBranch Online banking and bill pay allows you to schedule payments so you never miss a due date.

Tip 3: Don’t Use All of Your Available Credit

Revolving debt (typically credit cards and lines of credit) is the second largest factor in determining your score. Using only 10 to 30 percent of your available credit will help to improve your score. Using 40 percent or more will adversely affect your score.

Tip 4: Use Your Cards Responsibly and Don’t Cancel Old Cards

Length of credit history is the third largest factor in your credit score. Too many open cards and too many credit inquiries for new cards can adversely affect your score. Instead, keep the old card and use it occasionally so that it counts toward your credit history.

Tip #5: Avoid Store Financing Plans

The type of credit you use is also factored into your credit score. While it might seem like a good idea to take advantage of a zero-percent offer on a new refrigerator, store financing plans can be seen as a last-resort credit which might bring down your score.

Bonus Tip: Report discrepancies

Discrepancies regarding delinquencies, loan balances, unknown accounts, etc. should be reported to the credit reporting agency. You should also contact the party that reported the inaccurate information to let them know you are disputing the information. If you notice unfamiliar accounts or requests for credit not initiated by you, you might have fallen victim to identity theft and need to contact all three reporting agencies. You should also contact the police if it looks like your identity has been stolen.

Whether your score is flying high in the 800s or in need of repair in the 500s, you aren’t alone. Following these steps can help you improve your score and/or keep it a strong reflection of your financial responsibility.

Experian: 888-397-3742

Trans Union: 800-680-7289

Equifax: 800-525-6285

*This is basic information regarding your score and how to improve it. For additional questions, please contact a KEMBA representative.