Publish Date: February 8, 2023
We all know February is the month of love. But did you know it’s also a great time to get a pulse on the health of your credit? Understanding your credit score is an important part of managing your financial health, so Fidelity Bank & Trust recommends checking your credit reports regularly.
“Consumers can request one free credit report every 12 months from each of the three credit bureaus,” says Renee Funke, Assistant Vice President. “It’s a good idea to check your credit report for accuracy because the information is used to generate your credit score. A credit score is a numerical expression that reflects a person’s creditworthiness and is used by lenders to determine how likely it is that they will be repaid on time if they extend credit to a borrower. Additionally, a good credit score can help you get approved for rental agreements and even help you get a job,” added Renee.
Renee recommends these tips to keep your credit score in top shape:
- PAY ON TIME
Payment history accounts for 35% of your credit score, so paying bills on time should be a priority. If you struggle remembering to pay, consider setting up automatic payments as a feature of Bill Pay in our Online Banking platform.
- KEEP BALANCES LOW
Aim to keep your credit utilization ratio below 30%. For example, if your credit limit is $1,000, you should keep your balance at or below $300 to obtain a 30% utilization ratio. For revolving lines of credit, like a credit card, it’s best to pay off your balance in full each month to avoid interest charges.
- CHECK YOUR CREDIT REPORT REGULARLY
It’s a good idea to check your credit report for accuracy and signs of possible identity theft. You can request one free credit report every 12 months from each of the three credit bureaus – Equifax, Experian and TransUnion. If you find any errors or inaccuracies on your credit report, be sure to dispute them as soon as possible.
- LIMIT NEW CREDIT INQUIRIES
A credit inquiry is when you apply for new credit such as a loan or credit card. Too many inquiries in a short amount of time can negatively impact your credit score. In other words, be selective about what credit inquiries you make (and don’t say yes to every retailer that asks you to save money by opening their store credit card).
- BUILD A MIX OF CREDIT
Try to diversify your credit portfolio by having a mix of credit cards, loans and other types of credit accounts.
Ultimately, having a good credit score is essential to financial success. If you need more assistance on obtaining your credit report, understanding your credit score or how to improve it, contact your local banker. As Your Hometown Bank, we’re here to help!
