Mastering Credit

A credit score, also known as a FICO score, is a number based on how well you manage debt. Your credit score helps qualify you for loans, such as personal credit cards, mortgages, and buying a car. It can also impact your interest rates as well.

The number one factor that affects your credit score is payment history, but several factors are taken into consideration for a credit score. Below is a list of all the factors:

• Payment history: Paying bills on time is the most important factor.
• Credit utilization: Using a lower percentage of your available credit can benefit your score.
• Length of credit history: Longer credit histories generally have a positive impact. 
• New credit applications: Applying for multiple new accounts in a short period may temporarily lower your score. 
• Credit mix: Responsibly managing different types of credit can also play a role. 

If you have no credit history and are just getting started here are a few tips to build your credit:

• Pay your bills on time.
• Keep credit card balances low (if possible).
• Only borrow what you can afford to repay.
• Monitor your credit regularly.

You can monitor your credit through SELCO's digital banking when you enroll for free in SavvyMoney. Learn more about SELCO's digital banking.

Credit score ranges vary slightly by scoring model, but in general a good score is 670 and above. Below is a breakdown of how the scores range.

• 300–579 = Poor
• 580–669 = Fair
• 670–739 = Good
• 740–799 = Very Good
• 800–850 = Exceptional

A higher credit score may improve your chances of qualifying for loans and getting better interest rates.

You can check your credit score for free through SELCO's digital banking. You simply need to enroll in SavvyMoney and then you can monitor your score and visit your report anytime you want. Learn more about SELCO's digital banking.

Yes, budgeting can help improve your credit score because it can help you make on-time payments, reduce debt, and avoid missed bills. Budgeting doesn't directly change your score, but building and maintaining healthy financial habits may have a positive impact on your credit over time.

There are many misconceptions about credit scores, here are a few common ones:

• You have no control over your credit score.
• There's a 'quick fix' for your credit score.
• Checking your credit report will negatively affect your score.
• Opening or closing multiple credit cards will improve your score.

Understanding how credit works can help you make informed financial decisions.