Central Bank of St. Louis

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  • Your credit score and how to make it a winner [Infographic]

    Your credit score is a key factor when it comes to lenders deciding to extend you credit and it’s important to educate yourself on what makes up your score before you decide to apply for a loan. Your credit score is calculated using information in your credit report.

    a scale showing the solid credit score

    So, what exactly affects your credit report?

    Your credit score is a combination of the following components:

    1. Your Payment History - Whether or not you pay your bills on time directly impacts your credit score. Late payments or only paying the minimum amount can have a negative impact.
    2. Amounts You Owe - The amount of money you owe in relation to the credit line available.
    3. Length of Your Credit History - This includes the age of your oldest and newest account, how long you've had certain accounts, and how long it's been since you've used certain accounts.
    4. Mix of Credit You Currently Use - This includes existing mortgage loans, home equity loans, personal loans, retail credit accounts, and credit cards. A wide variety of credit is a good sign to lenders your credit worthiness.
    5. The Amount of New Credit You Have - If you are applying for a loan soon, it's a good idea to steer clear of applying for a smaller form of credit such as a credit card.

    Infographic explaining what impacts your credit score and how to improve your score

    Building your credit score can be done; however, it will take some time. It's not something that can be done overnight. Keep these tips in mind when trying to raise your score:

    Check your credit report regularly.
    It's important to know where you stand when it comes to your credit. It's never fun to be blindsided, especially in the process of buying a new home or a new car. You can get a free copy of your credit report to check for errors and simply to be aware of your score. Errors to look for include incorrect late payments, out of the ordinary credit inquiries, and incorrect payment amounts.

    Create payment reminders and alerts.
    Utilizing an online bill pay service and mobile alerts can help you stay on top of upcoming payments or simply put your recurring payments on autopilot. Life gets busy, but that's no excuse to miss or make late payments. With late payments, also come late fees.

    Reduce your debt.
    If your debt is excessive, then it's time to stop using your credit cards. Credit cards work against you if they are not used responsibly. If you have several accounts, be sure to pay off those with the highest interest first.

    Keep balances low.
    One of the best ways to increase your credit score to pay off your debt as you go and only buy exactly what you can afford. For example, use your credit card for your purchases and make weekly payments, or even monthly payments. When you start revolving balances, it can lead to a growing balance and interest charges if you're not careful.

    Pay your bills on time.
    If you pay your bills late, it will have a negative impact on your credit score. Make sure to pay your bills on time. If you're paying on a balance, try to pay more than the minimum payment when you can. This will not only help you pay off the balance quicker, but also look good to creditors.

    Pay debt instead of moving it to other cards.
    Refrain from using one credit card to pay off the balance of another credit card. Instead, focus on the card with the higher interest.

    Contact creditors.
    If you can't seem to get a handle on your debt, making arrangements to manage your credit can help you increase your score. Your bank or lending institution can make recommendations of organizations to help you get on the right track.

    Understanding what makes up your credit score and how to improve your score is an important step to your financial future. Take the time now to get your credit on track. Your future will thank you.



  • The information provided in these articles is intended for informational purposes only. It is not to be construed as the opinion of Central Bancompany, Inc., and/or its affiliates and does not imply endorsement or support of any of the mentioned information, products, services, or providers. All information presented is without any representation, guaranty, or warranty regarding the accuracy, relevance, or completeness of the information.