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Smarter Habits


Is my credit score good enough?


Credit Score and Credit Reports

A good credit score means everything to the consumer and to the financial institution or lender. It serves both interests and benefits both parties. To the consumer, a good credit score means lower interest rates and better payment terms. To the lender, it means that consumers will continue to receive better products and better service.

To your Smart Financial, it means that we would be able to continue serving more members while offering good products and competitive rates as well as give back to the community through financial education and philanthropic efforts.

However, there is more to a credit score than just numbers. Whenever an application for a credit card or loan is received, a lender pulls a credit report to decide on the following:

  • Approval
  • Terms of payment
  • Interest Rates if you qualify

Decisions, decisions


Decisions, decisions

Based on the information in the credit report, lenders make objective decisions:

  • Favorable - usually to low-risk borrowers
  • Unfavorable - usually given to high-risk borrowers

Low-risk borrowers pay their bills on time and maintain a considerably exceptional score in the 800's. High-risk borrowers usually have a score of less than 580.

FICO scores are the most popular among lenders as they show different versions when evaluating from three major credit-reporting bureaus:

  • Experian
  • TransUnion
  • Equifax

While credit decisions are based on a credit report, there are times when certain intangible factors may also be considered to evaluate a loan application. Examples of these are:

  • Involuntary job loss
  • Health-related reasons
  • Employment tenure
  • Other extenuating circumstances

Factors that affect credit scores


Factors that affect credit scores

Lending specialists are trained to objectively evaluate a credit report based on the following:

  • Payment History: Are bills paid on time? Are there any missed payments?
  • Amount of Debt: How much credit is available and how much is being used?
  • Length of Credit History: What is the average age of an account? Is credit established?
  • New Accounts: When was the last credit application? Is there a pattern of constant loan application?
  • Credit Mix: What type of credit accounts are in the report, e.g. mortgage, credit card, vehicle loans, etc.?

Get copy of credit report!


Free Credit Report 

Consumers are entitled to receive a FREE copy of their credit reports from the three credit reporting companies every year. To learn how you can get a copy, please click here. Credit reports contain personal information like the ones listed below that is why consumers are advised to monitor it regularly:

  • Personal Information: Name/s, Social Security Number, Date of Birth, Last known addresses, Employment Information
  • Accounts: Credit accounts arranged by
    • Type
    • Date Opened
    • Credit Limit or Amount
    • Balance
    • Payment History
  • Inquiries:
    • Soft inquiries occur when a report is pulled without an accompanying credit application. Inquiries like this usually happen as part of an employment application.
    • Hard inquiries occur when a lender pulls a report as part of a credit application. These types of inquiries usually have a relatively small impact on the credit score.

However, there is certain information that sends red flags to a lender or borrower:

  • Delinquent or missed payments
  • Overdue debts from collection agencies
  • Bankruptcies
  • Foreclosures
  • Tax Liens

Develop Smarter habits


Developing Smarter Habits to Help Improve Credit Scores

Good credit scores result from fiscal responsibility and habits developed over time.

To help improve credit scores, here are examples of #SmarterHabits to develop:

  • Make sure all information on your credit report is accurate and updated
  • Monitor your credit card balance
  • Maintain a low credit card balance, use credit responsibly
  • Pay bills on time
  • Do not borrow more than you can afford to pay
  • Maintain a credit card or two but do not apply for a credit card every chance you get
  • Strive to pay off debt instead of transferring it from one credit card to another
  • Open a secured credit card to build credit
  • Speak with your creditor to find alternative payment solutions

You may call our Member Services at 713-850-1600 if you have any questions or if you need help understanding your credit report.