Improving your Credit Score | Credit 101

Your credit score affects nearly every financial decision you make. Understanding how credit works and how to strengthen and boost your credit score is vital to practicing healthy financial habits. Credit is a subject that you can’t know enough about, so we’ve answered some frequently asked questions and compiled a list of steps that can be taken to raise and maintain your credit score.

Why is my credit score so important?
Want to buy a car? The dealership is going to check your credit score. Want to rent an apartment or buy a house? Your credit score will determine whether you’ll change your address. Applying for a job? Most employers run a credit check on job applicants. Essentially, your credit score shows how financially responsible you are.

What is a good credit score?
There are five basic credit score categories: poor credit, fair credit, good credit, very good credit, and excellent credit. The higher your credit score, the better. Once you enter the “good credit” phase, you’re on the right track to making major purchases such as buying a car or a house.

• Poor credit: 300-579
  
• Fair credit: 580-669
  
• Good credit: 670-739
  
• Very good credit: 740-799
  
• Excellent credit: 800-850
  

If you have poor or fair credit, don’t panic. There are steps you can take to steadily increase and maintain your credit score.

Pay your bills in full and on time

• Set up autopay; companies will often give you a discount for signing up for automatic payment. Another solution is to use Bill Pay in First Metro Bank’s online banking platform to schedule your bills in advance and set up automated payments.
  

• Try to only check your credit score once annually. This can be done for free at annualcreditreport.com. Be sure to dispute any errors that are on your report.