If you’ve ever been denied a loan or a credit card, it was probably because of your credit score. Perhaps you may have had good credit in the past, but are now experiencing a much lower credit score due to choices or life circumstances. Or, you may be building your credit for the first time as a young adult or as a newly single adult. Whatever the reason, you can rely on CSE Federal Credit Union (CSE) as your partner in building or reestablishing your credit. So, what exactly does your credit score say about you and why it so important?
A credit score is a numerical representation of the potential risk you pose to a lender. It’s based on several factors about your current and past credit usage, such as:
- On-time payment history
- Types of debt you hold
- Length of credit history
- Amount of debt you carry
- Total credit limits available
- Number of new credit lines
Depending upon your specific mixture of these factors, you will typically have a credit score ranging from 300 up to 850. So, how exactly does this score impact you, the borrower?
CSE Lenders use your credit score to determine the interest rate they will apply to the loans or credit cards you apply for. The higher your credit score, the lower the interest rate. A high (good) score says you’ve used credit carefully and managed your finances well. If you haven’t managed debt well, you’ll get a lower credit score and a higher interest rate. The higher the interest rate you get, the higher your monthly payment will be. This is why it’s so important to try to maintain a good credit score — it means you’ll have more affordable monthly payments.
“Here at CSE we evaluate credit scores so that we can address all credit needs. Our mission is to help all of our Members build financial success whether that means assisting first time borrowers with our special programs or ensuring that established borrowers get the best rates and terms around” says Donna Collins, CSE Consumer Lender.
Give CSE an opportunity to work with your credit report and your budget to help you find ways to pay down and eliminate debt or unnecessary expenses. Sometimes, it takes a fresh perspective to see your own situation clearly, and we’ve already helped countless Members do just that. This is especially true if you feel weighed down by debt and monthly payments. Give our credit counselors a chance to show you how to pare down your debt and build up your credit score. It’s one of your many free benefits as a Member of CSE!
Another benefit we provide to our Members is the opportunity to monitor your credit score for free through CSE Online services. Planning for a good credit rating is just as important as planning for major purchases and life transitions. The importance of a good credit rating means it can’t be an afterthought and it shouldn’t be left to chance.
If you do find yourself struggling to improve your credit score, visit CSE or join online at csefcu.org for helpful advice and guidance.