Credit Score Basics

Your credit score is one measure of your financial health and it influences your ability to secure loans and be seen as trustworthy by landlords or employers.

Accessing Your Credit Reports

Reviewing your credit reports helps you understand your financial standing and monitor for identity theft. You can safely access your credit reports at AnnualCreditReport.com

How to Improve Your Credit Score

Understanding the factors that impact your credit score can help you take control of your financial future. Here are the five main factors:

• Payment History (35%)

  • Pay all bills on time. Consistently making payments on time is the most important step to improving your credit score.

• Credit Usage (30%)

  • Keep your credit utilization low by paying down debt. Aim to use no more than 10% of your total available credit.

• Age of Credit Accounts (15%)

  • Keep your oldest banking and credit accounts open. Closing long-standing accounts will shorten your credit history.

• New Credit Inquiries (10%)

  • Limit applications for new credit accounts unless absolutely necessary.

• Credit Mix (10%)

  • Maintain responsible credit accounts such as a mortgage or a credit card that you pay off in full every month. You should avoid financial products that are difficult to understand or seem too good to be true.

Check for and Correct Errors

Reviewing your credit reports allows you to catch errors that might be lowering your credit score. If you find inaccuracies, such as incorrect debts or missed payments, you have the right to dispute them. Correcting errors can significantly improve your credit score, so it is important to review your reports carefully and take action if needed.

Be Consistent and Patient

Credit scores improve with consistent positive behavior over time.

• Pay your bills on time consistently.

• Avoid opening unnecessary new credit accounts.

• Manage your existing credit responsibly.

Negative marks like missed payments and inquiries will eventually fall off your credit report.
Stay consistent and make responsible financial choices and your credit will steadily improve.

Reading List: Consider visiting your local library to explore books on credit. You can borrow books for free and reading even one can have a big impact. Our recommendation if you are looking for more information on improving your credit is Your Score by Anthony Davenport. It is written by a former credit industry insider and offers strategies for understanding and improving your credit score.