A positive credit score can make it easier to access lower interest rates, better loan terms, and improve your overall financial health.
MSUFCU Chief Marketing Officer Deidre Davis is here today to discuss ways to build your credit score.
How can you improve your credit score?
First, understand your credit history. You can find this information in your credit report – a statement about your credit activity that includes loan payment history, the status of your credit accounts, and similar information. You can obtain a free copy of your report through AnnualCreditReport.com from each of the three major national credit bureaus: Equifax, Experian, and TransUnion. Right now, as part of a COVID-related policy, these reports are available weekly for free. Check your reports every four months, and report any discrepancies to the appropriate credit bureau.
Next, focus on paying your bills on time. Payment history has the biggest impact on your credit score. Set up automatic payments through your financial institution to avoid late or missed payments and the fees that come with them. If you’re unable to make your payments, contact your creditors to work out an alternative plan.
Keep your credit usage, or credit utilization, to less than 30 percent of your available credit. Credit utilization is the percentage of your credit limit you’re using at any given time. After payment history, it’s the second most important factor in calculating your credit score.
Also, keep credit card accounts open, even if they are paid off and you are not using them. This enhances your credit history and credit utilization.
If you have delinquent accounts, bring them current as soon as you can. It won’t erase the effect of late payments but it can improve your payment history going forward.
How can outstanding debt affect your credit score?
Consolidating your debt into a lower-rate loan could help you repay that debt faster while improving your credit utilization and credit score. Review the loan terms including the rate before signing any agreement to make sure you will save money.
What can MSUFCU do to help?
MSUFCU offers free virtual and in-person presentations on a variety of financial topics including understanding credit, what credit scores are, and more. Members with MSUFCU checking accounts or loans also receive free access to their credit scores through our mobile app and ComputerLine® online service. And, our knowledgeable employees are available to help you find lower-rate credit cards and loans for your needs.
To learn more, visit msufcu.org.
This segment is sponsored by MSUFCU.
