A credit score is a number that is assigned to you to show how well you handle debt. It’s important to have a good credit score, because credit unions and banks use the score to decide whether or not to give you a loan and what kind of interest rate, term, and monthly payment you can handle.
How do you initially get a credit score?
Take out a loan that fits the following criteria:
- Will have a payment history of 6+ months
- Is one of the following types:
- Credit Card
- Auto Loan
- Recreational Loan
- Personal Loan
Six months later, you should start to see credit report activity. Make sure to make all your payments on time to establish a good score!
What makes up my credit score?
These five factors are what make up your credit score. If you find that you need to improve your score, looking at these five facets of your credit report is a good place to start:
What is considered a “good score”?
The exact criteria for each rating can vary at different financial institutions, but at the MTEFCU, we go by the following rating system:
If you’d like to learn more about credit reports, look out for future posts on the subject. You can also contact a loan officer, and they will be glad to help you.