New Year, New Credit!
January 2021
With the start of the new year, it is time to make New Year’s resolutions. One New Year’s resolution is to take charge of your credit score. Here at Ascension Credit Union, we want to help our members achieve their high credit score. Here are four easy steps to get better credit!
MAKE PAYMENTS ON TIME
Payment history makes up 35% of your credit score, so it’s important to stay on top of those due dates for credit card and utility bills. If you can, set up automatic billing so you never miss a due date. You don’t have to pay off the balance in full every time (although it is recommended), but make sure you pay at least the minimum payment amount by the due date. Your score prioritizes payment history from the last 2 years, so recent payments have the most impact.
KEEP THE CARD YOU’VE HAD THE LONGEST
The length of your credit history makes up 15% of your credit score. The longer you’ve had a positive payment history, the better your score. One mistake some people make is closing out credit cards after they’ve paid them off. This can negatively impact your score because you’re not only reducing the total amount of credit available to you, but you may also be closing out a card that you have a long payment history with, thus bringing down your score.
THINK TWICE BEFORE OPENING NEW ACCOUNTS
Opening a bunch of accounts won't help your credit score. In fact, it's better to avoid multiple hard inquiries into your credit report and manage your existing debt .New accounts will lower your average account age, which will have a larger effect on your FICO Scores if you don't have a lot of other credit information. Even if you have used credit for a long time, opening a new account can still lower your FICO Scores.
CHECK YOUR CREDIT REPORT FOR ERRORS
Everyone is entitled to a free copy of their annual credit report from each credit reporting bureau. Some of the most common errors found in credit reports include accounts belonging to another person with a similar name, closed accounts being reported as open, accounts with incorrect balances, accounts created as a result of identity theft. If you find an error on your report, you can file a dispute with the credit bureau that has the incorrect information.
Ascension Credit Union wishes everyone a Happy New Year! If you want to start building your credit with us, we are here to help. Contact us at 225-621-8200 or visit our website at ascensioncu.org!
