Your credit score plays a major role in your financial life, yet many people don’t fully understand what goes into it. Whether you are applying for a mortgage, financing a car, or setting up utilities, your score can impact the rates you receive, the terms you are offered, and even whether you are approved.
A credit score is essentially a snapshot of how you manage debt and repayment. The biggest factor is payment history, so making on-time payments for loans and bills is one of the best ways to build and maintain a strong score. Other key factors include how much debt you carry compared to your income, the length of your credit history, and how often you apply for new credit. Carrying too much debt may lower your score, while keeping your balance low and paying down loans shows responsible borrowing. Accounts that remain open and in good standing for many years can also work in your favor.
It is also important to be mindful of new applications, since each one usually results in a hard inquiry that can lower your score temporarily. Checking your credit report regularly helps you catch errors or signs of identity theft early, and you are entitled to a free copy each year from the three major bureaus through AnnualCreditReport.com.
At HUD Federal Credit Union, we know a healthy credit score opens the door to more opportunities and better loan terms. By paying on time, managing debt wisely, and monitoring your report, you will be setting yourself up for long-term financial success.
HUD Federal Credit Union is federally insured by NCUA. Equal Housing Lender.
