Improving your credit

Your credit score may not be very visible in your day-to-day routine, but it can have a big effect on your life. Taking out a loan, renting an apartment and getting a job can rely on this hidden number.

Credit scores range from 300 to 850 – and the higher it is, the better. Each of the three credit bureaus that calculate your score do so a little differently, but here's a typical formula* for the five factors that go into your credit score:

• ♦  Payment history: 35%. Creditors like to see timely payments – and they like to see them recently. If your score takes a hit from a late or missed payment, the effect will fade as time passes.
• ♦ Available credit: 30%. This considers both the amount of money available to you through all types of credit and how much you’ve already used.
• ♦ Length of credit history: 15%. The longer you’ve had credit, the better.
• ♦ Credit mix: 10%. Ideally you have both installment credit (like an auto loan) and revolving credit (credit cards).
• ♦ Credit inquiries: 10%. New credit applications or debt in the last 12-18 months can negatively affect your score, so be sure to consider that before applying for a new credit card.

Every day, your financial actions can raise or lower your credit score. Here are some tips:

• Make your payments on time, even if it’s only the minimum amount due.
• Use more installment credit than revolving credit.
• Avoid keeping credit cards at their limit.
• Don’t cancel multiple credit cards at the same time.

To keep an eye on your credit score, simply log in to Veridian’s online banking and activate Credit Central. This free service reports your score to you, provides tips for increasing it and notifies you of potential savings on your debt.

If you'd like to discuss your unique financial situation, fill out the form below.