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6 Things to Know About Your Credit Score

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“I need a loan. What does my credit score have to do with it?”

Simply put, your credit score is a reflection of your credit history. It is the tool lenders use to gauge whether or not you’ve paid your bills and your likelihood of paying them on time as agreed in the future. So, if you are looking into borrowing money to purchase a car, your first home, or even looking for the best credit card rates, taking care of your credit history and improving your scores should be at the top of your list of things to do.

Steps to building a good credit score:

  • Pay your bills on time. This is the most important thing you can do. Life has a way of throwing us all a curve ball or two, so don’t dwell on the past – instead, focus on what you have control over and take every step to avoid late payments in the future. If all you can pay is the minimum required amount due, do that, and do it on time.
  • Monitor credit card balances. If you have active credit cards, do what you can to pay the balances off monthly. If that is not possible, do what you can to keep the balances below 30% of their limits. The lower your balance-to-limit ratio is, the better.
  • Maintain accounts that have a good credit history. Because credit scores reflect a borrower’s credit history, you’re going to want to make sure your credit report includes all the good payment history you’ve accrued over the years. So, don’t close the credit card you’ve had for 10 years that you’ve never made a late payment on. That good history is golden!
  • Don’t apply for new credit or loans that you don’t need. Having too many credit inquiries in a short amount of time can impact your scores as it gives the appearance that you are searching for credit and at risk of increasing your debt load, which could negatively impact your ability to maintain on-time payments. Generally, 6 or more hard credit inquiries in 45 days are too many. Less is best.
  • Consider your credit mix. Having a variety and balance of different types of credit (credit cards, auto loans, personal loans, mortgages, etc.) can indicate your ability to responsibly manage all types of debt. This does not mean you should go out and take out all kinds of new loans rather; it is something to keep in mind as you continue your lifelong credit journey.
  • Review your credit reports regularly to ensure accuracy. You can get a free annual report from It is your best way of knowing what lenders see, and if there’s anything on there that doesn’t belong, you can take proactive steps with the major credit repositories to get things fixed.

Heartland Credit Union has financial coaches available to help. Please call 800-362-3944 or visit our website to schedule an appointment. You can also check out the Consumer Financial Protection Bureau.


Author: April O., Heartland Residential Mortgage Lender with over 20 years of mortgage lending and real estate experience. She is known for listening to members’ needs and identifying the best available options to meet their individual goals and dreams. Schedule an appointment with April.