September 2009 Show Me StreetWise Guide to Using Financial Services CashPak The DCU Way StreetWise Scam Alerts Street Smarts By Will DeHoo, DCU Show Me Spokesperson What Is Your Credit Score? Do you know what credit is? Credit is an arrangement for you to pay for something at a later date. More important, do you know what your credit score is? And do you know how important your credit score will be for the rest of your life? A credit score tells businesses the likelihood that you will make your payments. It is used by every business that grants credit to determine if you are trustworthy. That's why it's one of the most powerful things you'll ever possess. Think about this: Do you have $10,000 in cash to pay for a new car? No? Well, do you have $250 and a job? Credit lets you purchase higher-ticket items and pay for them over time. However, the longer you use credit, the more interest you'll pay. Consider this: With a good credit score, you could get a cheaper loan with a lower interest rate. With a bad credit score, you could be forced to pay excessive interest rates. Credit affects everything that you do: Want to own your own home some day? A bad credit score will keep you from getting a good mortgage – or any mortgage. Want a better job? Plenty of employers won't hire you if your credit is bad. Buying insurance? Bad credit can increase the amount you pay. Changing telephone companies? Some companies don’t want you if your credit score is bad. These five actions, based on your habits, determine your credit score:* Do you pay on time? If you pay your bills on time, your credit score goes up. And if you don't, your credit score will go down! How much do you owe? Do you have a loan or a balance on a credit card? How much credit you have outstanding determines a part of your credit score. What type of credit do you have? A credit card with a $1,000 limit is more important than a $25 credit at a local store. How long have you had each type of credit? The length of time you’ve been making loan payments matters. How much new credit do you have? Did you just apply for five credit cards to get those cool gifts? If so, your credit score will go down. If you're college-age, you can start building credit the smart way. But before you open any accounts, do this: Go to dcu.org and click "FoolProof Solo" on the right side. Watch the intro video. Start working through the modules. Do you want to be independent? This is where you start: with your credit! Cheers, Will  *  Everyone's situation is different and the suggestions shown in this article are a guide for improved financial awareness and not a guarantee of better credit. « Previous Main Menu Next »

Have you had a good experience with DCU that you want to share with others? Send us an email at dcu@dcu.org or mail it to: DCU, PO Box 9130, Marlborough, MA 01752-9130, Attn: Marketing Dept. Visit Show Me and FoolProof Solo online for more money management advice and ideas. Visit dcu.org and select "StreetWise" then "Show Me." Images may be from one or more of these sources: ©Jupiterimages, ©Getty Images, ©iStock, ©SnapVillage. ©2009 Digital Federal Credit Union. Digital Federal Credit Union PO Box 9130 Marlborough, MA 01752-9130 508.263.6700 • 800.328.8797 • dcu.org • dcu@dcu.org TTY 800.395.5146 (For hearing impaired only) Powered by Priority