Your credit score is a key indicator of your financial health. Whether you’re applying for a loan, a credit card, or even renting a home, your credit score can make a significant impact. At Everglades Federal Credit Union, we’re here to help you understand and improve your credit score so you can achieve your financial goals.
What Is a Credit Score?
A credit score is a three-digit number that represents your creditworthiness. It’s calculated based on your credit history and helps lenders determine the level of risk in lending to you. The most common scoring model is the FICO® Score, which ranges from 300 to 850:
- Excellent (800-850): Exceptional credit with strong financial history.
- Very Good (740-799): Good credit, access to favorable rates.
- Good (670-739): Average credit, generally approved for most loans.
- Fair (580-669): Below average, may face higher interest rates.
- Poor (300-579): Limited access to credit; improvement needed.
What Impacts Your Credit Score?
Five key factors influence your credit score:
- Payment History (35%): On-time payments are crucial. Late or missed payments lower your score.
- Credit Utilization (30%): The amount of credit you use compared to your credit limit. Aim to use less than 30% of your available credit.
- Credit History Length (15%): A longer credit history often results in a higher score.
- Credit Mix (10%): Having a variety of credit types (e.g., loans and credit cards) can improve your score.
- New Credit (10%): Opening too many accounts in a short period can be seen as risky.
What Impacts Your Credit Score?
Improving your credit score takes time, but small, consistent efforts can lead to big improvements:
- Pay Bills on Time: Even one missed payment can have a significant impact.
- Reduce Credit Card Balances: Lowering your credit utilization can quickly boost your score.
- Avoid Opening Too Many Accounts: Be selective when applying for new credit.
- Regularly Check Your Credit Report: Mistakes can occur. Dispute errors to ensure your score reflects accurate information.
- Keep Old Accounts Open: Even if you’re not using an account, it contributes to your credit history length.
What Impacts Your Credit Score?
Did you know you’re entitled to a free credit report every year from each of the three major credit reporting agencies—Equifax®, Experian®, and TransUnion®? Visit AnnualCreditReport.com to get your copy today.
How We Can Help
At Everglades Federal Credit Union, we’re committed to your financial success. Our team offers:
- Free Credit Counseling: Personalized advice to improve your score.
- Educational Resources: Tools to empower your financial journey.
- Credit Builder Loans: Designed to help you establish or rebuild credit.
Take Charge of Your Financial Future
Your credit score is more than just a number; it’s the key to unlocking financial opportunities. Contact us today to learn how we can help you achieve your goals.