Having a good credit score is important, and as a credit union, Picatinny Federal Credit Union wants to make sure our members fully understand what a credit score is and how to improve it if needed.

Understanding a Credit Score

A credit score represents your creditworthiness in the form of a number. Credit scores typically range from 300 to 850. The higher the score, the better the creditworthiness. This number is based on your credit history, which is a detailed record of your past borrowing and repayment activities. Your credit score is important because lenders use it to determine whether or not to approve you for a loan or a credit card, and the interest rate that they’re willing to give you. 

There are quite a few factors that play a part in determining your credit score.

• Payment history: Are you paying your bills on time? If so, that helps your credit score.
• Length of credit history: How much credit do you have available and how much of it are you using? Maintaining a low credit utilization rate can help improve your credit score. 
• Types of credit: Do you have a mix of credits, including loans and credit cards? This can raise your credit score.
• New credit: Have you opened a lot of new credit accounts in a short amount of time? This can lower your credit score.

Benefits of a Good Credit Score

There are several benefits of a good credit score, especially when you’re a member of a credit union.

• Better loan terms: Credit unions typically provide better terms on auto loans, personal loans, and mortgages. Repayment options are likely to be more flexible.
  Lower interest rates: You can qualify for lower interest rates on credit cards and loans. Credit unions often offer more favorable rates compared to traditional banks.
  Fewer fees: Credit unions are known for having fewer and lower fees compared to traditional banks, saving you more money on transaction fees.
• Higher savings rates: Credit unions typically offer higher interest rates on savings accounts and share certificates (CDs). A good credit score can help you take advantage of these rates.
• Exclusive products: Some credit unions offer special financial products and services to members with good credit scores, such as premium credit cards with better rewards and lower interest rates.

Checking Your Credit Report

• It is important to monitor your credit report for errors. This could include mistakes with your personal information.
• Detecting fraud and protecting your identity is vital. By monitoring your credit report, you’ll be able to see unauthorized transactions.
• Regular checks on your credit report can help you improve your credit score. If you notice a late payment, you can address it right away.
• It is always beneficial to be aware of what is happening within your credit report to eliminate any surprises.
• To view your credit report, you can access it via AnnualCreditReport.com. Through this site, you can request your free credit report. Picatinny Federal Credit Union gives members access to view their credit score on demand, without affecting their credit score through Credit Sense, a feature within the online and mobile banking app. They can take advantage of advanced credit monitoring tools that break down the factors affecting their credit score, get tips for improving their score and much more. Members can also set up credit alerts and tips for improvement.

Tips to Improve Your Credit Score

There are various financial moves you can make to improve and boost your credit score.

• Pay bills in a timely manner: Set up automatic payments and reminders to help you make your payments on time. The Picatinny FCU online and mobile banking app makes this a seamless process for members.
• Reduce debt: You can pay more than the minimum on credit cards and loans to reduce your principal balance faster and decrease the amount of interest you pay over time. Use our debt calculator to help you determine the best distribution of your credit card debt. 
• Limit new credit applications: Applying for new credit requires lenders to pull your credit report, which will lower your credit score. If you apply for multiple new credit accounts, lenders will assume you’re at high risk financially.
• Keep old accounts active: Maintaining long lasting accounts shows that you’ve been responsible over time and have good credit management, which lenders pay close attention to when deciding whether or not to approve you for new credit. Closing accounts can negatively affect your credit score.

If being financially sound is important to you, then having a good credit score plays a vital role. There are numerous ways in which one can check their score, improve their score, and find healthy habits to reach an ideal credit score. Connecting with your trusted financial partner is a great way to stay on top of your score. Picatinny Federal Credit Union offers tools and resources that make it easy to access, improve, and stay educated on your credit score. Visit your nearest branch to meet with an MEP. They will gladly discuss your credit score with you, as Picatinny FCU is dedicated to helping you with all your financial needs.