Your Credit Score: What Do The Numbers Mean?

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John Holt, president and CEO of Nutmeg State Federal Credit Union, talks about how to check your credit score, and once you figure it out, what the number means.

Below are some tips from Holt. For more information, click here.

What do I need to know about my credit score?

  • Your credit score is a tool used by creditors to forecast your ability repay a debt.
  • Credit scores range from 850 to 300.
  • The vast majority of people will have scores between 600 and 800.
  • Your credit score is calculated based on factors such as payment history, outstanding debt, length of credit history and number of inquiries.

What is the best way to improve a credit score?

  • Pay your bills on time.
  • Don’t keep high levels of credit card debt.
  • Borrow from a local credit union or bank instead of finance companies.

What are some common misconceptions?

  • The credit bureau knows your income – They don’t!
  • Credit repair companies can fix your credit – They can’t – They only make it worse.
  • Paying off credit cards and closing the accounts will help your score – It doesn’t!
  • The credit agencies use the same criteria for determining a credit score – They don’t.

How can someone check their credit?

  • You can get a free credit report 3 times a year – One from each credit reporting agency.
  • There’s only one place to do at is NOT free!
  • Get your score from one of the three credit agencies. TransUnion, Equifax or Experian.

Does Nutmeg State Federal Credit Union have programs in place that can help people with bad credit?

  • Yes, we have a credit builder loan that is specifically designed to help you develop a good credit rating- perfect people who are looking to repair their credit.
  • The concept is simple- with low rates, you’re able to borrow anywhere from $500 to $1,000, and repay it anywhere from 6 to 12 months.
  • The credit bureaus monitor the loan activity so they will see that the debt is being paid off on time and your rating will improve as you make regular payments.
  • There is no penalty for paying off soon.
  • All our loan decisions are local with a quick approval process.
  • We also a have a “Second Chance Checking Account” that helps people who have had trouble managing their checking account in the past.

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