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.
To maintain credit score health follow theses 5 tips:
- 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.
- Make sure to make your payments on time. Set up payment reminders, automatic payments, or enroll in TSB Online Bill Pay.
- Reduce the amount of debt you owe. If you have multiple credit card balances, consolidating them with a personal loan could help your score.
- Know your spending limits. Creating a budget to track spending and manage expenses can give you more control on money management.
- Use your credit cards responsibly. If you borrow money from your credit card, make sure you have a plan to pay it back.