Understanding Your Credit Score and How to Improve It

Your credit score plays a big role in your financial life. From qualifying for loans to determining interest rates, it’s a key factor that lenders use to assess your creditworthiness. But what exactly is a credit score—and how can you make sure yours is working in your favor?

What Is a Credit Score?

A credit score is a three-digit number, typically ranging from 300 to 850, that reflects your credit history. The higher the score, the more favorably lenders view you. Credit scores are calculated using several factors, including:

• Payment History (35%): Have you paid past credit accounts on time?
• Amounts Owed (30%): How much of your available credit are you using?
• Length of Credit History (15%): How long have your credit accounts been open?
• Credit Mix (10%): Do you have a variety of credit types, like credit cards, auto loans, and mortgages?
• New Credit (10%): Have you recently opened new credit accounts?

Why It Matters

A strong credit score can help you secure lower interest rates, better loan terms, and even impact things like insurance premiums or rental applications. On the other hand, a low score could limit your options and cost you more in the long run.

Tips to Improve Your Credit Score

1. Pay Bills on Time – Your payment history is the most important factor. Set reminders or use automatic payments to stay on track.

2. Keep Balances Low – Try to use less than 30% of your available credit limit.

3. Avoid Unnecessary Credit Applications – Multiple hard inquiries in a short time can lower your score.

4. Check Your Credit Reports – Review your reports for errors.

5. Keep Older Accounts Open – A longer credit history can help boost your score.

We’re Here to Help

At Crane Credit Union, we’re committed to helping our members achieve financial wellness. If you’d like to learn more about your credit score or get personalized advice, our team is here for you.

Your credit journey matters. Let’s navigate it together.