What Makes Up Your Credit Score

Your credit score is a number between 300 and 850, which determines how likely you are to pay back the money you might borrow for a loan. There are a variety of items that help make up your credit score. Do you know what factors affect your credit score?

Understanding your score may be a little daunting, but you can get complete visibility into what factors affect your score and tips to help you improve it with SavvyMoney – a free and secure credit score monitoring tool available through your Members First Credit Union Online & Mobile Banking!

What Factors Affect Your Credit Score?

40% is Payment History
Do you pay your bills on time? If so, this will help your score. If you have late payments, this can bring down your score.

23% is Credit Utilization
How much debt do you have? How much money do you have available on revolving loans such as a credit card or line of credit? The more money you have available, the better it is for your credit score. When your credit card and/or line of credit is completely maxed out, this can bring down your credit score.

21% is Account Age
The longer, the better. Once you pay off a credit card, it is better for your credit score to leave the credit line open rather than close it out as this shows a longer term of established credit history.

11% is Mix of Credit
You want to show you can handle a mix of loan types. An example of this is having both an “installment loan”, such as an auto loan or personal loan, as well as a “revolving loan” or “open-ended loan”, such as a credit card or line of credit, that you can continue to pay off and borrow again.

5% is Recent Activity
If you have applied for credit recently, this can negatively impact your credit score. Be aware of certain credit monitoring sites and other activities that will pull your credit report – each time your credit is pulled, your score typically will go down a few points.

Why is understanding and improving your Credit Score so important?

• A good indicator of financial responsibility
• More likely to get approved for a loan
• It saves you interest over time

Use these tools to your advantage and enroll in the free and secure credit score monitoring tool, SavvyMoney, available within your MFCU Online and Mobile Banking! Just log in, and click “Credit Score” from the main menu on the left side. You will have to accept the user agreement and answer a few verification questions. Then you can start utilizing all of the features SavvyMoney has to offer including additional financial education resources to continue learning more about credit scores!