Your credit score impacts nearly every area of your financial life—whether you’re applying for a loan, renting a home, or even applying for a job. At Minnequa Works Credit Union, we believe in empowering our members with the tools and knowledge they need to build and maintain strong credit habits. No matter where you are on your financial journey, adopting good credit habits can lead to long-term financial freedom and peace of mind.
In this article, we’ll break down what credit is, why it matters, and the key habits that can help you build and maintain strong credit. Plus, we’ll share how Minnequa Works can support you every step of the way.
What is Credit, and Why Does It Matter?
Credit is essentially your financial reputation. It tells lenders how likely you are to repay money that you borrow. Your credit history is tracked by the three major credit bureaus—Experian, Equifax, and TransUnion—and summarized in your credit report and credit score.
Your credit score is a three-digit number, typically ranging from 300 to 850. The higher your score, the more trustworthy you appear to lenders. A strong credit score can help you:
- Improve job prospects in some industries
- Get approved for loans and credit cards
- Qualify for lower interest rates
- Secure rental housing
- Lower your insurance premiums
6 Habits to Build and Maintain Strong Credit
Strong credit doesn’t happen overnight. It takes time, patience, and consistent habits. Here are six proven credit-building strategies:
1. Pay Your Bills on Time- Every Time
Payment history is the most important factor in your credit score, making up about 35% of your total score. Set reminders or automatic payments to ensure you never miss a due date. Even one late payment can negatively impact your credit score.
Pro Tip: At Minnequa Works, you can set up automatic payments for your loans and credit cards so you never have to worry about forgetting.
2. Keep Your Credit Card Balances Low
Credit utilization—the amount of credit you’re using compared to your credit limit—makes up 30% of your score. Ideally, you should aim to keep your utilization below 30%. For example, if your credit limit is $1,000, try to keep your balance under $300.:
3. Avoid Opening Too Many New Accounts at Once
Each time you apply for a new credit card or loan, a hard inquiry is made on your credit report. Too many inquiries in a short time can lower your score and signal financial instability. Be strategic and intentional about when and why you apply for new credit.
4. Build a Long and Healthy Credit History
The length of your credit history counts for about 15% of your credit score. The longer your accounts have been open, the better. That’s why it’s often a good idea to keep older credit card accounts open, even if you don’t use them frequently.
5. Use a Mix of Credit Types
Credit mix refers to the different kinds of credit you have, like credit cards, auto loans, personal loans, and mortgages. A healthy mix shows lenders you can manage different types of credit responsibly. This category makes up about 10% of your score.
6. Regularly Check Your Credit Report
Mistakes happen, and identity theft is a growing concern. You’re entitled to a free credit report every year from each of the three major bureaus through AnnualCreditReport.com. Review your report for errors, unfamiliar accounts, or fraudulent activity.
Real Results, Right Here in Southern Colorado
We’ve seen our members achieve incredible results with the right credit-building strategies. From first-time borrowers securing their dream car, to young adults buying their first home—strong credit makes dreams possible.
If you’re ready to start your journey toward better credit, connect with our team today. Whether you’re looking for personalized advice, helpful tools, or simply a place to start, Minnequa Works Credit Union is here for you.
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