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Help Your Credit Score Soar
Brian and Dawn were ready to trade up to a larger home to accommodate their growing family. But when they began looking for a loan, they found that their credit score – once healthy enough to get them into their first home – no longer made the cut in light of today's tighter lending standards.
Your credit score – essentially a rating system of your creditworthiness – can affect your ability to secure a loan, insurance coverage, apartment and even a job. With so much riding on those three digits, it's wise to check your report and take steps to ensure your score is as high as possible well before you apply for credit.
Making the Grade
You want your credit score to be as high as possible – 720 and up is considered “very good,” and most mortgage lenders look for a score of at least 620. Below that, you'll find it harder and more expensive to acquire a good credit card or mortgage.
5 Tips To Boost Your Score
The following tips can help you keep your score in tip-top shape. At least six months before you plan to apply for credit:
- Pay down your debts. Keep your credit utilization ratio below 25% if possible. This number reflects your balance at the time you request the loan, so charging a big-ticket item around that time can skew the ratio, even if you intend to pay it off quickly.
- Keep and use old cards. The older and more established your credit history, the better.
- Pay your bills on time. A single missed payment can reduce your score by 100 points! Setting up recurring bill payments can help improve your score.
- Settle all fines and tickets. Outstanding library fines or parking tickets can reduce your score if a collection agency gets involved.
- Check your credit report for errors. Your credit score is based on the information contained in your credit report, so 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.
At LFCU, we offer competitive rates, flexible terms and helpful representatives who will work with you to find the best loan to meet your needs. Call (800) 328-LFCU, visit www.lfcu.com or stop by today to learn more.
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