Tips from the CUNA to Boost Your Credit Score

Every time you apply for a credit card, mortgage, car loan, or insurance, your application is judged in part by your credit score. Lenders use your credit score—ranging from 300 to 850—to determine whether to grant credit, and at what cost. The higher the score, the more likely you are perceived to repay the credit. Consumers with scores less than 600 usually are seen as higher risk and may pay a higher interest rate or are denied credit.

Fortunately, you can take steps to boost your credit score. These tips can maximize your score and influence your credit-worthiness.

Be punctual.
Late or missed payments, foreclosures, and bankruptcies have the greatest negative effect on your credit score. This accounts for 35% of your credit score, so make sure to pay your bills on time.

Check your credit report regularly.
Don’t let inaccurate information ruin your credit score. Consumers are entitled to one free credit report per year, which you can get online at Even though the credit report is free, getting your credit score will cost extra. You can obtain your credit score from the three major credit-reporting bureaus at,, and

Keep debt in check.
Try to keep your account balances below 50% of your credit limit. About 30% of your credit score is based on the amount you owe in relation to your credit limit. For instance, if your credit card has a limit of $2,000, keep the balance less than $1,000.

Avoid excessive inquiries.
New inquiries for credit account for 10% of your score, and a bunch of new credit requests—in a short period of time—can reduce your score.

Keep accounts open.
Time is one of the most significant factors that can improve your credit score. Fifteen percent of your credit score comes from how long you’ve been managing credit. Closing old accounts—especially ones with a good payment history—shortens your credit history and lowers your score. Lenders take into account the average age of your accounts, so an older account can help balance newer credit.

Keep a healthy mix.
The remaining 10% of your credit score depends on the types of credit you’re using. Make sure to have a healthy mix of credit. This includes things like a mortgage, a credit card or two, a car loan, and perhaps a retail card. We can help you acquire the mix you need.


Copyright 2006 Credit Union National Association Inc.

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