Score High on the Credit Test: Keys to Attaining a Good Credit Score
Despite all the ads we see on television, our credit score – what it is and how it affects our life – is a largely unknown factor to many of us. Even after the 2008 recession and more attention being given to knowing your personal finances, a lot of us still have questions: What affects my credit score? How does it affect me? How do I make it better?
|Your credit score is your gateway to a lot of great |
opportunities, so make sure it stays in good shape!
Lincoln Savings Bank
would like to provide answers to these questions in the hope that we can help you become a credit rock-star and maintain a great credit score.
What affects my credit score?
The simple answer is everything you do that uses credit and generates debt, from student loans to credit card debt. Other factors taken into account are how much of your credit you use, timing of payments, how quickly you pay off your debt and the diversity of your credit.
How does my credit score affect me?
In more ways than you know. Lenders use your credit score to assess your risk. The more risk you carry (i.e., the worse your credit score), the lower the chance of you being approved for that credit, or the higher rate you will be charged for that credit. Mortgages
, auto loans, personal loans, credit cards; you could be paying higher interest rates for all of these if your score is poor.
How do I improve my score?
There are a number of ways to boost your score:
· Make your payments on-time
· Make more than the minimum payment
· Use credit smartly- never use more than a third of the total amount available to you
· Have a repayment plan- lenders and credit score companies see constant payments over time, even on high balances, as a sign you can handle debt intelligently.
The most important thing to remember is that no matter what you do, improving your credit score is not an overnight thing. It takes time and building a solid history to really boost your score, but staying vigilant will increase your chances of getting the best rates for your future financial projects.