As a new year begins, you may be mulling over what resolutions you’d like to tackle, such as exercising more or getting organized. If you’re considering ways you might improve your life, here’s another idea you may have missed: Increasing your credit score!
What makes a credit score so important? Well, your score is a concrete way of demonstrating how responsible you are with your financial commitments. It can have a significant impact when you apply for a loan, rent an apartment, or even apply for a new job.
There are a couple of reasons someone may be faced with a low 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 Scott Credit Union as your partner in building or reestablishing your credit.
While there are several factors that affect your credit score, your payment history is the biggest piece of the puzzle. Make payments on time, and your score goes up! Here are three ways we can help improve your payment history and build your credit score.
Pledge share loan
If you have no credit or a low score, it can be hard to get approved for a typical loan. You may find it much easier to qualify for a pledge share loan instead. Also known as secured loans, pledge share loans are backed by collateral from your share savings or share certificates. Because they are secured by collateral, the loan gives you the opportunity to access funds for a lower rate than unsecured loans.
Credit builder program
Getting approved for a credit card can be difficult when you don’t already have an established credit history. If you have a true zero credit score and have been employed at your current job for one year, you may qualify for a credit card through SCU’s credit builder program. By making your payments on time each month, you’ll gradually build your credit history with the three major credit bureaus.
Secured credit card
Consider setting aside funds aside to secure a credit card in your name. You’ll have the convenience of shopping with a reputable card brand, and we hold the funds in one of your SCU accounts to secure your purchases. You pay off your card balance or make monthly payments by the due date each month, and your credit score could go up.
Compare our low interest rates with no annual fee to bank products, and you’ll see they generally have higher interest rates and annual fees. It’s easy to see why it makes sense to build your credit with your Scott Credit Union membership benefits.
The importance of a good credit rating means it can’t be an afterthought and it shouldn’t be left to chance. Consider making “improve my credit score” one of your New Year’s resolutions this year.
More from the Banking Simplified Blog:
How to Improve Your Credit Score