A High Score Can Help You: Responsible Credit Decisions Now Can Pay Off Later

By Denise Reinoso Wayman

Do I have credit? Why does credit matter? What is a credit score? Should I apply for as much credit as I can get? You may have asked yourself these questions.

A credit score evaluates a consumer’s creditworthiness. Lenders use credit scores to gauge how likely someone is to repay debts. Someone with a higher score is considered more financially trustworthy.

Lenders generally offer lower interest rates to borrowers with high credit scores. If you have a low credit score, you may not qualify for certain loans or have to pay higher interest rates, which increases your cost of borrowing. If you have no credit score, that usually means you haven’t established credit yet.

Establishing credit usually means borrowing money (using a credit card or getting a loan) and making your payments on time.

Missing payments can lower your credit score, so be realistic about how card or loan payments fit into your overall budget. It takes time to rebuild your credit score after it declines.

Credit_Reporting_AgenciesCredit is not a taboo topic. You may need a loan someday to further your education or buy a car or house. Wouldn’t it be great to be offered the best rate possible? Here are a few tips:

  • Apply for only credit you need – be smart about what you’re doing and why.
  • Be responsible with the credit you have.
  • Make your payments on time.
  • Keep a low credit card balance and pay it in full monthly.

Start by setting up a relationship with your primary financial institution – manage your accounts responsibly, and there’s no better place to start establishing your credit.

You’re entitled to some free information

AnnualCreditReport.com is the official, authorized website to get free credit reports form the three major reporting agencies – Equifax, Experian and TransUnion.

Visit annualcreditreport.com/index.action for more information. It’s important to know what’s on your credit report.

If you have questions about credit or if you’re wondering about planning for your financial future, we would be happy to talk to you!

About the Author

Denise Reinoso Wayman is Regional Operations Manager for Everence Federal Credit Union. She works from their office in Mount Joy, Pennsylvania.

*The logos of Equifax, Experian, and Transunion belong to their respective companies and do not imply their endorsement of the Ecumenical Stewardship Center or its programs

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