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Credit Scores Matter

Your credit score can affect your life in many ways. It follows you around – influencing where you live, how much you can buy, and even what car you drive. It makes sense to keep your score as high as possible and work to improve it when you can.

Some facts up front

Your credit score is not the same as your credit report.

A credit report contains detailed information of an individual's credit history. It shows loans, late payments, bankruptcies and any recent inquiries. It is prepared by credit agencies to determine creditworthiness. Think of it as a school report card with all your classes shown. The info on the report will influence your credit score.

A credit score is calculated through a complex formula based on different factors that determine the actual number. You have more than one score as different credit agencies and financial institutions use different formulas. Also, your score can change monthly depending on the activities during the month. For the most part, your credit score is most influenced by how you pay your debts and how much debt you owe. Think of it as your GPA from all the “grades” on your credit report.

Improving your score

  1. Find out your score.  Check out this helpful article from the Consumer Financial Protection Bureau on the different ways to obtain your score, some of them free.
  2. Get a free copy of your credit report. You can do this for free once a year from each of the three national credit reporting companies at The website can walk you through the process of disputing the report if you feel it is inaccurate.
  3. To improve your credit score
    1. Pay your bills on time
    2. Pay down credit card debt
    3.  Make more than the minimum payment.
    4. Don’t open too many new accounts.
  4. If you are going to be late on a payment, contact your lender right away. They may work out a payment arrangement with you. Being late or missing a payment greatly affects your credit history and score.

This is a VERY quick snapshot. Have more questions? Your local bank or credit union can help you out.