Understanding Your Credit Score

by Isa Dragone 07/25/2019

Your credit score can be a vast unknown when you are starting out in life. When you are just beginning you may not know what factors the financial world considers to calculate your creditworthiness. At this point, you are what the credit reporting agencies call credit invisible. To create a credit score, you will need to take your time and remain intentional. Websites like Nerdwallet.com and Annuity.org have information to build your credit score and financial health. Take your financial health seriously and be proactive about getting the information you need to create a stable future.

Annual Credit Reports 

A good starting point is to order your credit reports from all three reporting agencies. You get a free one from each of them every twelve months. An easy way to remember to check on your report yearly would be to order them on or near your birthday. If you find errors on any of the reports take the time to have the reporting agency, make corrections; then follow up. Next step in creating a credit score would be to open a secured credit card. This type of card is a credit card where the credit limit is equal to the amount of money you deposit. Your neighborhood bank or nearby credit union that you have your current accounts with can help you. 

Another way to build your credit is to take out a small credit builder loan. These credit-builder types of loans are designed to help you start developing a credit history. You can find them at credit unions and smaller community banks. When you take out this kind of loan, the money sits in an account, not accessible until paid in full. Make your payments on time and the financial institute reports those on-time payments to the credit reporting agencies. Once paid off the funds plus any interest is released to you. You now have the start of a credit score and perhaps a small emergency fund or start to a down payment.

Keep These in Mind

The essentials of building your credit score are:

- Making timely payments

- Keep your balance 30% or less of your available credit

- Monitor your credit reports

- Be patient

Time is your friend when you are just starting. By being patient and diligent, you will see a steady climb in your numbers. Like diet and exercise, financial health is only achieved by ongoing healthy habits. 

 If you have not ordered your credit reports in the last 12 months, order them this week and see where you stand.

About the Author
Author

Isa Dragone

Isa balances her business background with unparalleled customer service, and acts as an advocate providing information and guidance to her clients throughout their transactions and beyond. Clients can expect to receive an exceptional level of service with frequent communication and unwavering integrity when working with Isa. Her work style is professionally casual and likes to take a personal approach when working with clients; making what can be a stressful experience a little easier.

Originally from Waltham, Isa moved to Marlborough with her husband of 20 years, 2 kids and her Mom over 14 years ago. Waltham will always have a special place in her heart, but she loves home in the Suburbs, making it a passionate conversation when discussing real estate in this area. Isa spends her free time visiting friends & family often, dining locally, walking her East Marlborough neighborhood daily, attending concerts with her husband and snuggling with her Maltipoo Stella. Above all watching her kids growing into amazing young adults is her true joy and she cant spend enough time with them.