10/19/2017: Five Tips for a Healthy Credit Score

Your credit score is a pretty important three-digit number that summarizes your credit health. Lenders use credit scores to determine the risk in issuing a loan, the amount to lend, and also to determine how much interest that customer should pay. The higher the score, the lower the risk. High risk can in turn mean a higher interest rate.

Have you ever wondered what ingredients make up the credit score secret sauce? According to FICO Score, there are 5 main elements: Payment History, Amounts Owed, Age of Credit History, New Credit, and the Types of Credit in Use.

Breakdown of Fico Score

To maintain credit score health follow theses 5 tips:

  1. It’s important to check your Credit Report to make sure all personal and financial information is accurate and that no fraudulent accounts have been opened in your name. 
  2. Make sure to make your payments on time. Set up payment reminders, automatic payments, or enroll in TSB Online Bill Pay.   
  3. Reduce the amount of debt you owe. If you have multiple credit card balances, consolidating them with a personal loan could help your score.
  4. Know your spending limits. Creating a budget to track spending and manage expenses can give you more control on money management. 
  5. Use your credit cards responsibly. If you borrow money from your credit card, make sure you have a plan to pay it back.