Understanding Your Credit Score

Your credit score is a number that helps lenders understand how you have managed borrowed money. It may be used when you apply for a credit card, auto loan, mortgage, or other type of loan and can affect the rates and terms you qualify for.

The good news? Your credit score isn't permanent. Your financial habits can influence it over time.

What Affects Your Credit Score?

Payment History
Paying your bills on time is an important part of maintaining healthy credit. Late or missed payments may negatively affect your score.

Credit Usage
Using a large portion of your available credit may affect your score. Keeping credit card and revolving balances manageable can help demonstrate responsible credit use.

Length of Credit History
How long you've had credit matters. A longer history of responsibly managing accounts can help lenders better understand your borrowing habits.

Types of Credit
Having experience responsibly managing different types of credit, such as credit cards and installment loans, may also factor into your score.

New Credit
Frequently applying for new credit may affect your score. Be thoughtful about opening several new accounts within a short period.

Ways to Build and Maintain Healthy Credit

Start with a few simple habits:

  • Pay bills on time.

  • Keep credit card balances manageable.

  • Avoid applying for unnecessary credit.

  • Review your credit reports regularly for inaccurate information.

  • Keep older accounts in good standing.

  • If you fall behind, focus on getting current and building consistent habits going forward.

Know What's on Your Credit Report

Your credit report and credit score are related, but they are not the same thing.

Your credit report contains information about your credit accounts and payment history. Your credit score is calculated using information from your credit history.

Reviewing your credit reports can help you understand what lenders may see and identify information that may need to be corrected.

You can request your credit reports from the three major credit bureaus: Equifax, Experian, and TransUnion.

One Good Step at a Time

You don't need perfect credit to start making progress. A missed payment or high balance doesn't mean you're stuck forever. Credit scores can change as your financial habits change.

Start with your next good step: make a payment on time, lower a balance, review your credit report, and continue building from there.

Have Questions About Credit?

Mobility Credit Union is here to help you better understand your credit and make informed financial decisions.

Contact us to learn more about credit, borrowing, and building a stronger financial future.

Educational content only. Credit-scoring models vary, and lenders may use different scores and criteria when evaluating credit applications.

Have questions? Call us at 214.574.2000