Credit Score 101

What You Need To Know About Credit Score

Your credit score is vital to your future. It can determine your ability to get a loan, and have a lower interest rate on your loan. A low credit score could also impact your future employment, insurance premium, and ability to rent an apartment, condo, or home. FICO scores have a score range of 300 to 850.

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What Makes Up A Credit Score?

Your credit score can be a tricky subject to understand. There are specific elements that make up your credit score including:

  • Payment History: Do you pay your bills on time?
  • Capacity: Do you have available credit, or have you maxed out multiple credit cards?
  • Length of Credit History: How long has your credit been in use?
  • Types of Credit: This includes installments, and number of finance company loans. The greater the number of finance company loans, the lower the score. That’s why it pays to apply for a credit card or loan with Launch FCU.
  • New Credit: Accumulation of debt over the last 12-18 months.

What Affects A Credit Score

  • Late payments
  • Missing payments all together
  • Maxing out multiple lines of credit
  • Excessive credit shopping
  • Opening mulitple lines of credit in a short amount of time
  • Having more revolving loans than installment loans
  • Borrowing from finance companies. These commercial finance companies will charge you a higher interest rate than Launch FCU.

What Doesn’t Affect A Credit Score

  • Debt ratio
  • Income
  • Length of residence
  • Length of employment


How To Improve Your Credit Score

There are several things that you can do to help improve your score over time.

  • Pay down on your credit cards
  •  Make all of your payments on time
  • Stop opening multiple credit cards and store credit cards
  • Allow yourself time to build credit by acquiring a solid credit history with years of experience
  • Move any revolving debt to installment debt
  • Request your credit report from the three major credit-reporting agencies: Equifax,Experian, & TransUnion. You are allowed to receive your credit report for free once per year from all three of the major credit-reporting agencies. This will help you to catch any potential errors that could be affecting your score.

At Launch FCU we are dedicated to helping our members go beyond to achieve their financial goals. For more information on how your credit score works, or ways to improve your credit score please visit our website, or give us a call at 321-455-9400 (inside Brevard) or 800-662-5257 (outside Brevard), or visit us at any of our conveniently located branches.

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