Never assume a good credit score is out of reach.
Your credit score is just one of the many factors – including your income, employment history, etc. –that determines the amount of debt you can handle. Having a higher credit score gives you more options. The great news is that you can improve low scores over time.
Contrary to popular belief, a “bad” credit score is not a terminal diagnosis. And that’s not the only myth that needs to be dispelled. Here are a few more:
- Closing a credit card improves your credit score: Actually, the opposite is true, especially if you close the card with a balance. Why? Credit bureaus and lenders look at how long accounts have been open, as well as the credit utilization ratio (the amount of credit being used to the amount of total credit available). If you close an account with a high credit limit that has a longer positive history and a balance, it could result in lowering your score, not raising it.
- Checking your credit lowers your score: It’s not only good to check your credit, but it’s highly recommended. You are not penalized for checking your own credit. It’s the best way to stay on top of any reporting errors and identity theft. You need to be aware of what’s on your credit report to know which steps you can take to improve your scores. You are entitled to a free annual credit report from all three main credit bureaus (Equifax, Experian and TransUnion). Because you don’t know which bureau lenders use, it’s best to check all three. And now through April 2021, all three bureaus are allowing free credit reports weekly. Just go to AnnualCreditReport.com.
- Building a good credit score = going into debt: Just because you need to use credit products doesn’t mean you need to create more debt than you can afford. Simply opening a credit card and paying off all charges in full each month will give you the history needed to build a good credit score.
If you are looking to build your credit, we have options to help. Speak to one of our loan officers about how you can improve your credit with a credit builder loan or a secured credit card.
For more financial tips, visit your local credit union. HealthNet Federal Credit Union has proudly served Baptist Memorial Health Care employees and the health care community throughout the Mid-South for more than 60 years.
For information about the credit union, please call 901-226-1111 or visit www.healthnetfcu.org.
