Improve Your Credit Score and Reap the Benefits

Personal Banking |

We’ve all heard that having a high credit score is a good thing – but what makes up a credit score and how can an exceptional one make life better for you?

Credit Score Basics

Your credit score is based on a scale from 300 to 850, with 300 being poor and 850 being excellent. This number is made up of a variety of factors and indicates the likelihood you’ll pay back a debt. Statistics that make up a credit score include your on-time payment history, how much you owe, length of credit history, variety of credit accounts, and new credit inquiries. The two primary credit score sources are FICO and VantageScore.

How Your Credit Score Can Serve You

Having a great credit score can save you money when it comes to borrowing for a home mortgage, car loan, or another expense – and with interest rates on the rise, this is truer than ever.

Consider securing a $350,000 home loan. A borrower with a “fair” credit score of 620 might get an 8.26% interest rate, while a borrower with an “excellent” score of 703 may qualify for 7.03%. If you think that 1.23% loan rate difference isn’t much, think again. The preferable rate means a housing payment of $295 less each month – that’s $3,540 every year!

Build a Better Credit Score

The stakes of having a solid credit score are high – but the good news is that there are things you can do to improve yours:

  • Pay on time. This is the single largest influence on your credit score – so pay on time! Setting up automatic payments in online bill pay is a great way to avoid late payments.
  • Keep utilization rates low. People with excellent credit scores generally have average balances below 7% of available credit on cards.
  • Leave old accounts open. Have a credit card you never use? Instead of closing the account, put the card in a drawer and forget about it. Closing an account can cause your credit to take a hit – the open line of credit boosts your available credit to balance owed ratio.
  • Ask for a credit limit increase on credit cards – but don’t use it. This is another strategy for increasing your available credit to balance ratio.
  • Review your credit report and correct errors. Anyone can request a free credit report annually at Look it over and dispute any mistakes.
  • Limit credit applications. Only apply for credit that you actually need, as inquiries can cause your score to dip.


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