Monthly Archives: August 2016

Your Credit Score Could Score You a Mate

Your Credit Score Could Score You a Mate

Your Credit Score Could Score You a Mate

Why is a credit score important?  A good credit score can help you secure a loan.  A better credit score can help you secure a loan with a great rate.  Your credit score can have influence with renting an apartment, better car payments, or even applying for a job.

Looking for a mate?  Believe it or not, there is a dating website devoted to people looking for that someone special who has a good credit score.

Untitled design (3)Do you know your credit score? Having good credit might actually be more important that getting a date or finding a mate.  A good credit score is a way for you to save money by getting a better rate on your loans.  Some credit card companies will now provide your score on your monthly statement. If you don’t know your credit score, then get one for free.  Each of the major credit bureaus—Equifax, TransUnion and Experian—will provide one free credit report per year.  Be sure to space your requests so you can check your scores throughout the year.

Yes, there are three credit bureaus and each has its own formula to determine your FICO score. FICO is the company that created the software to take the credit information from one of the credit bureaus and predict if you are a good risk to pay your bills on time.  FICO is not a credit reporting agency, they just do the math.  (Random trivia, FICO stands for Fair Isaac Company; they officially shortened it FICO a few years ago.)

Credit Scores will range from 300-850.  If your score is below 550, then you have some work to do to show yourself as a good risk.  With a 550-720 score you might not get turned down for a loan but your interest rate could be higher.  Being above 720 with your credit score is the goal.

How is a credit score calculated? There are 5 areas:

  1. Payment History
    1. This is 35% of your score. Yes, it is important to make payments on time.
  2. Capacity
    1. This is 30% of your score. The less you use of your total available credit each month, the better.
  3. Length of Credit
    1. This is 15% of your score. A longer history of good credit habits can have a positive effect on your score.
  4. New Credit
    1. This is 10% of your score. Be careful, opening many new credit cards in a short period can hurt this part of your score.
  5. Mix of Credit
    1. This is 10% of your score. Having a mix of credit cards and installment loans, such as a mortgage or car loan can boost your score.  As long as you are paying on time.  (See Payment History above.)

So, know your score. Make your payments on time. And, keep an eye on your capacity.  Learn to control what you can control. Atlantic Federal Credit Union believes that financial education is power.

And if you are looking for a date who has a good score, who knows? It’s amazing what you can score on the internet these days.

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