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Helpful Credit Tips

Updated: May 29, 2020

What is a credit score and why do I need to know what mine is?

A credit score is the number that determines your credibility as a borrower.  It represents the level of risk a lender assumes when extending credit to you. In other words; how likely are you to repay your debt.  

Your number can range between 300 and 850 and is determined by factors such as your payment history, your credit experience or the age of your credit portfolio, your debt to credit limit ratio etc.  The higher the number the more attractive you are to a lender, the more likely they are to extend credit with favorable terms.

An undesirable credit score can affect your eligibility for a mortgage loan or apartment rental.  You could be denied approval for a credit card, or even if approved, receive a high interest rate or a have a low credit limit extended to you. If you are considered a credit risk i.e. you have a low credit score, your utility company or even your cell phone carrier can require a deposit before allowing you to open an account.  

Is my FICO score the same as my credit score? A FICO score is a different brand of credit score.  The name or abbreviation comes from the Fair Isaac Company; (The company has since changed its name to just FICO) whose specialty is “predictive analytics “ FICO is not a credit reporting agency, but they use information provided by 3 major credit reporting agencies

  • Equifax

  • Experian 

  • TransUnion


The scores they develop can determine the likelihood of profitability or bankruptcy of an account.  While there are many credit scores available, you will most often hear of a FICO score because it is the score used by 90% of creditors.

How do I find out what my credit or FICO score is?

While many credit card companies offer your FICO score, you can request a free detailed credit report every year through www.annualcreditreport.com

**Due to COVID-19, they are offering a weekly report until April 2021**

How is your score calculated?

** Running your own credit report does not count as an “inquiry” **

What is not factored in when calculating your credit score?

You don’t have to make a lot of money to have good credit. Your credit score is not affected by your income, your checking or savings account, or even if 

What does my score mean?

  1. Pay your bills ON TIME! This is the factor that carries the most weight on your credit report, so when at all possible pay your bills on time.  Great if you can pay more than the minimum balance, but at least pay the minimum payment ON TIME!

  2. Clean up errors on your report Always make sure to pay your bills on time, if you don’t you run the risk of them going into collections.  This counts negatively on your credit and can stay on your report for a really long time. However, if you have errors on your report, you can call yourself, or you can look into CollectionSheild360 a free service that aids in repairing your credit report.

  3. Raise your credit limit If you are owing more than 30% of your credit limit it is affecting you negatively.  Try to lower the percentage by paying off your debt, and in the meantime attempt to raise your line of credit to lower the ratio.

  4. Pay off your card, but don’t close your account…unless! While it is understandable that you may not want to have temptation, having available credit is a good thing, not to mention having an open card adds to your “length of credit history”.  The only reason to really close a card is if there is an annual fee and you are not using the card.  

5. Pay your card off every month If you can, have a small reoccurring charge on your account each month that you pay off before the statement closes and this shows (even though the amount is small) you paying a card off which reflects positively on your credit report

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