Why clean credit should always be at the top of your to-do list this summer.

It’s the time of year we like to get things done. Deep cleaning around the house, getting your summer wheels ready, planting a few flowers – even paying off those nagging bills. Why not use it as a time to clean up your credit, too? There’s nothing more satisfying knowing you’re on top of your finances and reaping the rewards!

Why is good credit important?

Establishing good credit is a boon to your finances in many ways.  You’ll save money on the loans you receive, enjoy lower insurance premiums, and good credit can even help you rent an apartment or land a job! Broadly speaking, your credit history impacts many things in life, with savings estimated to be at least $250,000 over your lifetime when you commit to having good credit.

Your credit is a reflection of how you handle yourself and your money.

Building your credit history.

Your credit history is a collection of information about you. It can include your recent loan applications, the amount and types of loans you have, how you repay those loans, even the insurance coverages you carry. It also contains where you live and work, how timely you pay other bills and all sorts of info about your finances and lifestyle.

The first day of your credit history starts when you borrow money and begin to repay.

What is a credit score?

It compiles all of the info in your credit history and puts it into a number or “score.” This score serves as a guideline and helps lenders decide how good of a risk you are. Scores range from 300 to 850. The higher the score, the better. (Or, in the eyes of the lender, the more likely you are to repay a loan.)

The higher your credit score, the more you’ll save money with lower loan rates and on other financial needs.

Ever wonder what exactly goes into your score?

Factors can impact your score differently, but most lenders use credit scores that follow the “FICO” model:

  • Payment history – 35%
  • Total debt – outstanding credit balances, both dollars owed and available credit- 30%
  • Length of credit history – 15%
  • Credit inquiries -10%
  • Graphic courtesy of Phillip Newton.

Tips to improve your score:

  • First, and really important, is to pay your bills on time. It’s one of the most straightforward actions you can take. Also, if you have any past-due accounts, do everything you can to bring them current.
  • One way you can ensure payments are made on time is to automate loan payments and other recurring bills. Visit www.adviacu.org to sign up for our free Bill Pay.
  • Be choosy when using your credit cards and revolving debt. Try tapping into just 30 percent of your available line.
  • Pay down any credit balances that are maxed out. If you’re having trouble, consider a debt consolidation loan from Advia. We can help you to get rid of the niggling bills for one easy payment. A lower rate will also help to reduce your monthly payments and what you’re paying in finance charges.
  • Be particular when applying for new credit and avoid applying to numerous sources; too many credit inquiries can hurt your score.
  • Try not to accumulate large amounts of new credit quickly.
  • Keep tabs on your credit score and check your credit report for errors (They’re usually clerical). If you see mistakes, contact the credit reporting agency to correct errors you find. If you need help, let us know. Our representatives can help you look for errors and give advice on how to correct those you may find.
  • Visit www.annualcreditreport.com. It’s a great resource which collects information from all three credit reporting agencies. The Fair Credit Reporting Act requires each of the nationwide credit reporting companies – Equifax, Experian, and TransUnion – to provide you with a free copy of your credit report, at your request, once every 12 months.

Beware of scams claiming to “fix” your credit.

Usually, these scams claim to clean up your credit quickly for a charge. Visit us instead. We can offer solid suggestions to get you on the road to cleaner credit – like starting automatic bill payments or consolidating debt into a low-cost loan. We can even help you to close out certain credit accounts from unscrupulous lenders.

At Advia, we can get you on the path to better credit, without fees or charges.

Good credit is just a step away.

Like most good things in life, there’s no quick fix to clean credit, but there are steps you can take that will have an immediate impact. Like paying your bills on time and choosing good sources to obtain credit. You’ll be surprised what a bit of fortitude and resilience can accomplish!

Success is within reach. And you’ll feel confident knowing you’re on the path to a stronger credit history.

At Advia, our financial advisors can help you learn more about building a credit history or improving your score. Visit www.adviacu.org for more information.

Contact us at 844.ADVIA.CU (844.238.4228). Deposits are federally insured by the National Credit Union Administration (NCUA) up to $250,000 per account.