Understanding Your Credit Score—and How to Improve It With Credit Union Products
What Exactly Is a Credit Score?
Your credit score is a numerical summary of your credit history, typically ranging from 300 to 850. Higher scores indicate strong financial habits and responsible borrowing. Most lenders use the FICO® Score, which is based on information from the three major credit bureaus: Equifax, Experian, and TransUnion.
Here’s what goes into your score:
? 35% – Payment History
Do you pay your bills on time? Even one late payment can have a significant impact.
? 30% – Amounts Owed (Credit Utilization)
How much of your available credit are you using? Ideally, keep this under 30%.
? 15% – Length of Credit History
The longer your accounts have been open, the better.
? 10% – Credit Mix
Lenders like to see a healthy combination of installment loans (like auto or personal loans) and revolving credit (like credit cards).
? 10% – New Credit
Opening several new accounts in a short period can lower your score—temporarily.
Why Your Credit Score Matters
A strong credit score can help you:
- Qualify for lower interest rates
- Get approved for loans more easily
- Pay less for insurance in some cases
- Access better financial products
- Increase your overall financial flexibility
And because credit unions return value to members—not shareholders—we work hard to help you improve your financial well?being.
How Your Credit Union Can Help You Improve Your Score
Your credit union offers tools and resources designed to help you build or rebuild credit without unnecessary fees or predatory terms. Here’s how we can help:
1. Credit?Builder Loans
A credit?builder loan is one of the simplest ways to start improving your score. Instead of receiving the loan upfront, the funds are placed in a secure savings account while you make small monthly payments. When the loan is paid off, you receive the money—and a positive payment history.
Benefits:
- Build credit safely
- Low monthly payments
- Savings at the end
2. Secured Credit Cards
If you’re new to credit—or looking to repair past mistakes—a secured credit card is a powerful tool. You simply place a deposit as collateral, which becomes your credit limit. Use the card responsibly, and your score grows over time.
Pro tip: Keep your balance low and pay off the card in full each month.
3. Free Credit Score Monitoring
This lets you track your progress, spot changes early, and identify areas to improve.
- Score updates
- Credit alerts
- Personalized tips
4. Refinancing High?Interest Debt
High credit card balances can drag down your credit score. Refinancing to a lower?rate personal loan or transferring your balance to a low?interest credit union credit card can reduce your utilization and help you pay down debt faster.
Financial Counseling & Education
As a not?for?profit financial cooperative, your credit union provides personalized guidance—often at no cost. A financial counselor can help you create a plan to manage debt, improve your credit, and build long?term stability.
Simple Habits That Can Boost Your Score
Small steps add up. Try incorporating these habits into your routine:
- Pay all bills on time
- Keep credit balances under 30% of your limit
- Avoid opening too many accounts at once
- Check your credit report annually for errors (at AnnualCreditReport.com)
- Keep older accounts open, if possible
Your credit union's financial advisors can help you map out the steps that make the most sense for your situation.
You’re Not Alone—We’re Here to Help
Improving your credit score doesn’t happen overnight, but with the right tools and support, you can make meaningful progress. As a member?owned cooperative, we’re here to help you every step of the way—whether you’re building credit for the first time, repairing past credit challenges, or working toward major life goals.
If you’d like help reviewing your credit or choosing the right credit?building product, we’re just a call or click away.
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