Car on the road by the lake

How Your Credit Score Impacts Your Finances

Whether you are looking to buy a car, get a mortgage or rent an apartment for the first time, your credit score can tell a lot about your financial history. Your FICO® score is a number formulated based on your credit history. It helps lenders evaluate your credit risk. Several factors go into your score, including payment history, amounts owed, length of credit history and types of credit used.

Credit report paper

What's a Good Credit Score?

Your FICO score is rated on a scale of 300-850. You want a high score because a good credit rating can help you obtain better rates on all of the major purchases that life brings, including a car, home and credit cards.

To improve your credit score, follow these tips:

  1. Keep current on all your payments. This is the biggest thing you can do to boost your credit score. Be sure to pay your bills on time each and every month.
  2. Be aware of closing old accounts. It diminishes your total credit available and can raise your credit utilization ratio.
  3. Don't open new accounts. This can look like you plan to borrow a lot of money, which could stretch your finances too thin.
  4. Avoid collection agencies. Past-due debt will reduce your score if a collection agency gets involved.
  5. Check your credit report for errors. Your credit score is based on the information included in your credit report, so it pays to review it for inaccuracies. Federal law entitles you to a free copy of your report once every 12 months from each of the three major credit bureaus. Your credit score is also available for an additional charge. Simply go to www.annualcreditreport.com or call 877-322-8228.

Novation is here to help with all your financial needs, including reviewing your credit report with a Financial Services Officer. Simply call (800) 369-6628 or visit one of our convenient branch locations for more information. Or click here to learn more about obtaining a free credit report.