WHAT IS A CREDIT SCORE? - MSU Federal Credit Union
WHAT IS A CREDIT SCORE?
At MSUFCU, we strive to provide you with a wide range
of outstanding financial products and services aimed at
helping you reach your financial dreams. An important
part of attaining many of your financial goals, such as
buying a new home, car, or even finding a new job, is a
positive credit score.
KNOW THE SCORE
Your credit score is a three-digit number that
ranges from 300 to 850. Lenders typically
use this score to determine the likelihood
that you will be able to pay them back.
800+
Exceptional
Dependable
799-740
Good
669-580
739-670
Below Average
579
or less
Risky
The most commonly used credit score is
generated by three major credit bureaus
(Experian, TransUnion, and Equifax), and is
based on information in your credit report.
HOW IS YOUR CREDIT SCORE DETERMINED?
30%
15%
What makes up your
credit score?
35%
payment history
1
10%
10%
amounts owed
?
?
?
?
?
length of
credit history
IMPORTANT TO KNOW
One late payment can lower your score by
as much as 100 points.
You can challenge inaccurate information
on your report.
The total credit you have is less important than
your total available credit.
Debit cards will not repair or establish credit.
You may get a free copy of your credit report
each year.1
number of types
of credit
Free credit reports are available annually at . To receive your credit score, a fee may apply.
new credit
WHAT AFFECTS YOUR CREDIT SCORE
35%
Past History
30%
Amount Owed
15%
Length of
Credit History
10%
Types of
Credit in Use
10%
New Credit
Factors That Hurt Your Score
Ways to Improve Your Score
Late Payments. It takes about 24 months
to restore damaged credit from just one
late payment.
Pay on Time. Late payments are the most
common piece of negative information
on reports.
No Availability. Cards with balances at their
maximum credit limits lower your score.
Pay Down Debts. Bring delinquent loans
current.
Closing Revolving Accounts. This reduces the
history of your accounts and lowers available
credit limits.
Don¡¯t Close Accounts. Pay down or pay off
credit cards, but don¡¯t close them. A closed
account will still show up on your credit report.
Too Many Revolving Accounts. Revolving
credit (credit cards) reflects more negatively
than installment loans (auto loan, mortgage).
Revolving Credit. Move revolving debt (line-ofcredit accounts) to installment debt (closed-end
loan accounts).
Opening Multiple Cards. Multiple new
accounts opened in a short period of time
reflects negatively on your credit score.
Avoid Multiple Cards. Don¡¯t open multiple new
lines of credit in a short period of time.
HOW CREDIT INQUIRIES IMPACT YOUR SCORE
SOFT HITS
HARD HITS
¡°Hard¡± hits to your credit
report may affect your score.
Examples of soft hits:
? Inquiries by you: You can purchase
your credit score without penalty.
? Inquiries by insurance companies
Examples of hard hits:
? Inquiries by lenders: This can occur
any time you apply for a credit
account or loan.
? Inquiries by retail stores
Resources
¡°Soft¡± hits to your credit report
do not affect your score.
Request Your Credit Report:
Financial Calculators:
calculators
Credit Report Information:
creditreports
GreenPath Financial Solutions:
greenpath
Financial Seminars:
seminars
BudgetSmart Software:
budgetsmart
We¡¯re here to help!
If you¡¯re looking to rebuild your
credit, try our Credit Rebuild Visa!
This card is designed to help get
your credit score back on track.
Questions? Contact us!
517-333-2424 ? 800-678-4968
120
08/17
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