Level Up Your Credit With Minnequa Works
There are 5 easy steps to get a higher credit score. Minnequa Works Credit Union is here to help our Members through their financial life and we want to help share these top 5 tips to help you get a higher credit score!
Step 1 – Pay Your Bills on Time, Every Time
One of the easiest ways to show lenders and the credit bureaus how responsible of a borrower you are is to pay your bills on time. Of the credit scoring models that are used, 35% of your Credit Score is determined by payment history. This means that it is essential to pay your bills on time.
Make sure to pay all your bills, credit cards, and loans on time to avoid negative reporting to credit bureaus and to avoid late fees.
Step 2 – Keep Credit Card Balances Low
After making your payments on time, the next most important step to a higher credit score is to keep a low balance-to-limit ratio on revolving credit, such as a credit card. Credit utilization is what is used in credit score criteria that identifies how much of your credit is used in comparison to your total credit limit available.
As an example, let’s say that you have a total available line of credit of $10,000 on your Minnequa Works Credit Card, with a current balance of $2,500 – this means that you are currently utilizing 25% of your current credit available. The higher this percentage, the more likely your credit score will see a negative impact.
A major item to keep in mind on lowering your balances is to know that credit utilization is calculated for each credit card individually, as well as collectively for all revolving credit accounts.
Step 3 – Be Mindful of Your Credit History
Age matters. The average age of your credit matters. Before you close a credit card, be mindful of how long the card has been opened. If you are thinking about closing a credit account that has had a long and positive history, it may be more helpful to keep the account open as it helps to support your average credit history.
On average, 15% of your credit score is comprised of how long you have managed your credit, meaning longer credit history will typically reflect in a higher score. Additionally, it is also important to consider applying for credit in moderation, meaning that you do not want to submit a lot of credit applications within a short amount of time.
Step 4 – Improve Your Credit Mix
Diversifying your credit mix is another way to boost your credit score. Approximately 10% of your credit score is determined by a total mix of credit. This means that if you have only ever had a credit card reporting on your credit bureau, you will most likely not have as high of a score as someone that has had a credit card, auto loan, and mortgage that have been paid on time.
Step 5 – Review Your Credit Reports
Each year, you have the ability to request a free credit report from each credit bureau – Experian, TransUnion, and Equifax with resources such as AnnualCreditReport.com. It is beneficial to review your credit reports and ensure that information is reported accurately. If there are items that are incorrect, you can dispute the errors directly with the credit bureau. Additionally, by reviewing your credit, you can watch how your healthy credit habits are supporting a higher score.
Minnequa Works is Here to Help
At Minnequa Works Credit Union, we are here to work for you! We have unique products and services that are designed to help you save money and can also help you to build credit and work toward a higher credit score. Learn more and contact us today at mymwcu.com to Level Up Your Credit!
Reach out to our team today and review more options to help build your financial health!
“Helping People Through Their Financial Life”
