How much do you know about your credit score?
Your credit score is a rating lenders use when making decisions about approving loans and determining the terms and rates offered to you. Test your knowledge to see if you know what it takes to build good credit.
1. True or False: Credit scores range from 300 to 850.
2. True or False: A few late payments won’t affect your credit score.
3. True or False: Having multiple forms of debt generally helps your credit score.
4. True or False: Closing old credit card accounts will boost your score.
5. True or False: Paying off bad debt will erase it from your credit history.
6. True or False: Checking your credit report will hurt your score.
1. True. Credit scores are calculated between 300-850, and 700 or above is generally considered a good score.
2. False. Payment history is the most important factor in determining your credit score. Making on-time payments and keeping your level of debt at a reasonable level will help you improve your score. Late payments, on the other hand, will negatively affect your score.
3. True. Managing multiple forms of debt responsibly (e.g., a credit card, student loan and auto loan) helps build your credit history, and may boost your credit score if you make payments on time.
4. False. Part of your credit score is determined by the length of your credit history. If you close a credit account that you’ve been using for years, this average length of credit history may be shortened.
5. False. If you’ve missed payments or have a delinquent account in collections, paying off a debt does not remove it from your credit records. Most negative entries will, however, fall off your report in seven years.
6. False. Hard inquiries, such as applying for a credit card or a mortgage, could affect your score. Soft inquiries, like when you check your own score or order your free credit report, will not affect your score. You can check your credit reports at annualcreditreport.com. There are three main credit-reporting companies: TransUnion, Equifax and Experian, and you are allowed a free credit report from each every 12 months.
0-1 correct answers = Credit newbie — Taking the time to learn more about your credit score can help you get on track.
2-4 correct answers = Credit scholar — You’re on the right path, but can learn more to help boost your score.
5-6 correct answers = Credit star — You’ve got all the right information, now put it to work to improve your credit score!
Navigator Credit Union offers Members an innovative solution for establishing credit while saving for something special. With our Credit Builder Loan, you make regular monthly payments, Navigator reports your positive payment history to all three major credit bureaus – and you even earn interest on the money you’re saving while you build credit! Call or visit a full-service Branch today to learn about the Credit Builder Loan.