This year’s National Get Smart About Your Credit Day is October 21st, 2021! You can celebrate with us by taking the steps to learn about good credit. The importance of financial management is something that can and should be taught at a young age. Learning healthy credit habits can be one of the most valuable lessons a young person can learn.
What Elements Make Up a Credit Score?
35% of the score = Payment History: How have you repaid your debt in the past? Generally, anything negative will drive down your score, and anything positive will drive up your score. Your past lending behavior determines your future lending behavior.
30% of the Score = Credit Utilization: This part of the score focuses on how much available credit you have. Do you max out your credit cards? Are you always close to your credit limits? The best credit scores typically have anywhere from seven to 20 percent of their overall debt used.
15% of the Score = Length of History: It is impossible for a person who is new to credit to have a perfect score. Unfortunately, it doesn’t work that way. You must prove over time that you can manage credit responsibly.
10% of the Score = New Credit: How many credit inquiries or new lines of credit (including credit cards) do you have? More is not better in this instance. Be sure to limit any new credit you request to only that which you genuinely need. Having a credit card “just in case” will not usually help your score. You need to use the credit you have but use it wisely.
10% of the score = Credit Mix: What type of loans do you have? A credit card? An auto loan? A home loan? In most instances, lenders find that borrowers with the right mix of credit may be less risky.
As part of our ongoing commitment to providing the Bridge Difference, we are here to provide you FREE one on one credit score counseling as well as providing the resources you need to succeed. Make sure to check out our YouTube channel and this video on How To Boost Your Credit Score.
You can check on your credit score using Bridge’s Savvy Money through online banking.
Learn more about Bridge’s Platinum Visa® Credit Cards and our services! https://www.bridgecu.org/credit-cards/
Source: https://www.myfico.com/credit-education/whats-in-your-credit-score
https://www.rate.com/research/news/credit-score-components
