Financial Advice

Understand Your Credit


What You Need to Know About Credit Scores

Bill Berglund, UFCU's Manager of Consumer Underwriting, visits KXAN's Studio 512 to discuss the basics of credit scores, what they impact, and how to improve yours.


What is a credit score?

  • It is a 3-digit number calculated by the credit Bureaus to determine your credit worthiness. 
  • FICO credit scores can range from 300-850. A higher score is better.

Why should you care, how it can impact you?

  • A low credit score could cost you thousands of dollars in interest on a loan due to a raised interest rate.

What 5 factors determine your credit?

  • Payment History – 35% of score
  • Amount Owed – 30% of score
  • Length of Credit History – 15% of score
  • New Credit –10% of score
  • Mix of Credit – 10% of score

How can you build/improve your credit?

  • If you have no credit, apply for a secured loan or credit card. Since they are backed by your own money, secured loans are easier to get approved.
  • Make payments on time and don’t max out your card.
  • Pay down balances and/or pay off your credit cards every month
  • Avoid opening many new credit accounts in quick succession.
  • Have a good mix of auto and credit card loan products.

Know your score! Check with your financial institution for loans first.