Your credit score is a numerical representation of your creditworthiness, and it is used by lenders and financial institutions to determine how likely you are to repay your debts on time. A high credit score can be beneficial because it can make it easier for you to qualify for loans, credit cards, and other forms of credit. On the other hand, a low credit score can make it more difficult for you to access credit and can result in higher interest rates and fees.
There are a number of steps you can take to improve your credit score and keep it high. Here are some tips on how to do this:
- Pay your bills on time: One of the most important factors that affects your credit score is your payment history. Lenders and financial institutions want to see that you have a history of making your payments on time, so it is important to make sure that you pay all of your bills on time each month. This can help you avoid late fees, improve your payment history, and boost your credit score.
- Keep your credit utilization low: Your credit utilization is the amount of credit you are using compared to your total available credit. For example, if you have a credit card with a limit of $1,000 and you have a balance of $500, your credit utilization is 50%. A high credit utilization can lower your credit score, so it is important to keep your credit utilization as low as possible. You can do this by paying off your balances in full each month or by increasing your credit limits.
- Avoid applying for new credit unnecessarily: Every time you apply for new credit, the lender will most likely perform a hard credit inquiry, which can temporarily lower your credit score. To avoid this, try to limit the number of credit applications you make, and only apply for new credit when it is absolutely necessary. Also worth mentioning is keeping your oldest credit card open. Keeping your oldest credit cards will help in maintaining your overall credit age.
- Check your credit reports regularly: It is important to check your credit reports regularly to make sure that the information they contain is accurate and up-to-date. If you find any errors or discrepancies on your credit reports, you can dispute them with the credit bureaus and have them corrected. This can help improve your credit score and ensure that it reflects your true creditworthiness. Our myClub and myPremium Checking Accounts come with free credit report monitoring tools to help you check your credit score anytime and anywhere.
myPSFCU has resources and financial literacy programs to help you understand and manage your finances. We also offer financial consulting and help guide you towards financial wellness. Contact us if you have any questions and we’ll be more than happy to help you!