Understanding Your Credit

Learn more about credit and why it's important to maintain a healthy credit score. 

Credit is a powerful tool

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What is credit?

Your credit score is more than just a number; it's a reflection of your financial health. We're here to demystify the subject and answer some common questions related to credit.

A closer look at credit scores

Credit scores are three-digit numbers that reflect creditworthiness. They are calculated based on various financial behaviors. Understanding what your credit score represents is the first step to managing it effectively.

Why credit scores matter

Lenders use credit scores to decide on credit offers, loan terms and how much the loan or credit will cost you. The higher the credit score, the easier it is to secure a loan with a favorable rate and term. As a result, individuals with higher credit scores are offered more competitive rates and pay less for the money they borrow.

Factors influencing your credit

Your credit score is influenced by multiple factors. Familiarizing yourself with the following factors can empower you to make decisions that positively impact your credit:

  • Payment history
  • Credit utilization
  • Length of credit history
  • Types of credit accounts 
  • Recent inquiries 

Credit-building habits

Building good credit starts with responsible financial habits. Whether you're starting from scratch or working to improve your credit score, these tactics can help you boost your creditworthiness:

  • Set up automatic payments to pay your bills on time
  • Keep credit card balances low in relation to your credit limit
  • Maintain a mix of different types of credit if possible
  • Regularly monitor your credit reports for errors or discrepancies
  • Try not to close old credit card accounts as they contribute positively to your credit history
  • Avoid opening multiple credit accounts in a short period as it can lower your average account age

Learn more about credit scores with this quick video

Make a positive impact on your credit score today.

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