What Makes Up Your Credit Score?
Maintaining a good credit score begins with selecting the right credit card for you. There are certain things to look for when picking a credit card. Consider the following:
- What financial institution is this card through?
- Is there an annual fee?
- What is the Annual Percentage Rate (APR)?
- What are the minimum payment requirements?
- Are there any rewards or cash back options?
Once you decide on a card that will work for you, it's time to start gaining credit. A credit score is a number that provides a snapshot of your credit history in one number. The higher the number, the better the score.
The categories that make up your credit score include:
- Payment history (35%)
- Amount owed (30%)
- Length of credit (15%)
- New credit accumulation (10%)
- Type of credit (10%)
It is a lot easier to maintain your credit when you are just beginning than improving it later. There are many ways to make sure you don't get on the debt treadmill.
- Manage your credit utilization. Aim for keeping your outstanding balance to 30% of your credit limit available.
- Pay in full or as much as possible to avoid paying extra in interest down the line.
- Monitor your account regularly to ensure all transactions were authorized.
- Monitor your credit. Federal law allows you to receive a free copy of your credit report once a year. To access a free report, visit Annual Credit Report.com - Home Page.
Finally, one of the most important tips for maintaining good credit is to build a relationship with your banker and use them as a resource. SFB personal bankers are here to guide you through any questions you may have. Reach out to us today to learn more. For more information, contact 888-254-0615.