Morning Mix


MSUFCU shares tips on how to improve your credit score

Posted at 10:59 AM, Nov 22, 2019
and last updated 2019-11-22 11:00:18-05

If you have applied for a credit card, auto loan or tried to rent an apartment, you most likely have heard the term credit score, often called FICO®.

Deidre Davis, MSUFCU’s Chief Marketing Officer, talks about what a credit score is and how you can improve it so you can get the best interest rates when you apply for a loan.

A credit score — a three-digit number — is what lenders use to help them decide how likely it is you will repay a loan on time. The higher your score, the more likely you are to qualify for loans and credit cards at the most favorable terms, which will save you money. A consumer's credit score calculated with software from Fair Isaac Corporation is known as a FICO® score. According to FICO®, more than 90% of top lenders use FICO® scores.

Your credit score is determined by five factors, including:

  1. Payment history – do you pay your bills on time?
  2. Utilization ratio – do you use less than 30% of your available credit?
  3. Length of credit history – how long have you had your credit cards or loans?
  4. Recent activity – how much credit have you’ve received or applied for?
  5. Overall capacity – how much total debt do you have?

There are several ways you can establish a credit history, including:

  • a secured credit card.
  • a co-signed credit card.
  • another person’s card which you have asked to become an authorized user on.

If you want to build credit without a credit card, you might try a credit-builder loan, secured loan, or co-signed loan. There are also ways to use rent, phone, and utility payments to build credit through rent-reporting services.

Certain credit score factors are more important than others. For instance, payment history and credit utilization ratios are among the most important, so paying your bills on time and keeping your credit balances low can help improve your score. Other ways you can improve your credit score include:

  • Applying for and opening new credit accounts only as needed. Don't open accounts just to have a better credit mix—it probably won't improve your credit score.
  • Don't close unused credit cards. Keeping unused credit cards open — as long as they're not costing you money in annual fees — is a smart strategy, because closing an account may increase your credit utilization ratio.

A good FICO® score can help you qualify for the best interest rates and terms when you borrow money. Considering how important credit scores are to your overall financial well-being, it's wise to do everything you can to ensure yours are as high as possible.

Learn more about how MSUFCU can help by visiting