Credit is your ability to borrow money today with the promise that you’ll repay it in the future.
As you use credit, lenders may report your account information to the major credit bureaus, creating your credit history. Future lenders review this history to better understand how you’ve managed credit in the past.
A strong credit history can make it easier to qualify for loans and may help you receive lower interest rates.
Your credit score is a snapshot of your credit health.
It’s a three-digit number that reflects how you’ve managed borrowed money over time. Lenders use your score to help determine whether to approve your loan application and what interest rate you may qualify for.
This three-digit number is calculated using information from your credit history and provides lenders with a quick snapshot of how you’ve managed credit over time.
A higher credit score demonstrates responsible credit management and may improve your chances of qualifying for loans with more favorable interest rates and terms.
| Score | Rating |
|---|---|
| 800-850 | Exceptional |
| 740-799 | Very Good |
| 670-739 | Good |
| 580-669 | Fair |
| 300-579 | Poor |
Ranges are based on commonly used FICO® Score categories.
While credit scoring models vary, most credit scores are based on five key factors. The percentages below represent the approximate weight each factor carries in calculating a FICO® Score.
Keeping an eye on your credit score is one of the easiest ways to stay informed about your financial health. Regularly monitoring your credit can help you track your progress, identify potential issues early, and better prepare for future borrowing needs.
My Financial Health
As a Breakwater Federal Credit Union member, you have access to My Financial Health, a free credit monitoring tool available through Online Banking and the Breakwater mobile app.
Depending on the version you choose, My Financial Health includes features that allow you to:
Learn more about how to access and use My Financial Health in Mobile or Online Banking here.
Myth: Checking my own credit hurts my score.
Fact: Checking your own credit is considered a soft inquiry and does not affect your credit score.
Myth: Carrying a balance helps my credit score.
Fact: Paying your credit card in full each month can still help build good credit while saving you money on interest.
Myth: Closing old credit cards always improves my score.
Fact: Closing older accounts can sometimes shorten your credit history or increase your credit utilization.
Credit reports and scores can be confusing to interpret. If you would like help understanding how to read your credit report, our loan officers would be happy to meet with you to show you what it says, what is currently affecting your score, and what steps you can take to improve your score. Schedule an appointment today!
Looking to learn more? Stop by Breakwater Federal Credit Union and pick up a free copy of All About Credit.
This easy-to-read guide covers topics such as:
Whether you’re just beginning your credit journey or looking to strengthen your financial knowledge, All About Credit is a great resource to keep on hand.
Free copies are available in our lobby or when meeting when one of our lenders.
