What Makes Up Your Credit Score?

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.