Did you know that a strong credit score allows you to obtain better rates on loans, better rates on your insurance policies, and the ability to secure affordable housing? Generations United Federal Credit Union wants to provide you with the information and services you need to understand your credit score. Listed below are two articles to help you understand your credit score.

WAYS TO BOOST YOUR CREDIT SCORE

• If your spouse or parent has a good credit rating, become an authorized user on a credit card that your parents or spouse pays off on time.
  • You can be an authorized user but have no access to the card, but since you are on the card and the payment history is good, your credit rating gets a boost.
• Never get close to your spending limit.
  • A good guide is to never use more than 30% of your credit limit.
    • If you need to max out your limit or greatly exceed to 30% guide, pay your card prior to the statement date as the statement date is when credit card companies notify a credit bureau of your card usage.
• It is always beneficial to pay off your balance in full.

HOW IS YOUR CREDIT SCORE CALCULATED?

• Payment History (35%):
  • Do you pay what you owe on time?
• Amounts Owed (30%):
  • Follow the guidance of keeping your credit balance under 30% of your credit limit.
    • Example: Credit limit equals $10,000, so keep the balance on the card under $3,000.
• Length of Credit History (15%):
  • The longer you have credit the stronger your score will be.
    • Determine what is your oldest credit card account, try to keep this account open and pay off the balance each month.
• New Credit (10%):
  • Each time you open a new line of credit your score is impacted for the negative.
    • Ask yourself: Do you need that store card or 4^th credit card?
• Credit Mix (10%):
  • Try to have a mix of revolving credit (credit cards) and installment credit (mortgage or car loans).