By Andrea Elias

A simple three-digit number known as your credit score can make a big difference in your financial life. If you’re thinking of financing a vehicle, applying for a line of credit or buying a home, you’re going to want to make sure your credit score is where it needs to be in order to qualify and get the best terms possible.

How is a credit score calculated?

A credit score takes into consideration the types of accounts you have open such as loans and credit cards, how much credit you use of your available credit, how often you apply for credit and how long your accounts have been opened. 

What’s a good credit score?

Credit scores range from 300 to 850 with the average score falling between 600 to 750. If you’re aiming for good, you’re going to want a score that’s at least 700 or higher. 

How do I get a good credit score?

Payment history makes up about 35% of your credit score and missing payments or making late payments, can significantly affect your score. Set up automatic bill pay to help you stay on track. Be sure to contact creditors if you feel you’re going to be late and try to work out some options to avoid any marks on your credit report. 

Try to keep your credit usage low as credit utilization makes up 30% of your credit score. The total of your available balances across all accounts is then divided by your total credit limit giving you your credit utilization ratio. The general rule is to aim for a 30% or less utilization ratio. 

Making multiple payments to multiple creditors can be overwhelming which can affect your ability to make payments. If this is the case, debt consolidation could be a good option for relief. Applying for a loan or credit card with a low-interest rate to help pay off debt and consolidate to just one payment can also help you pay off your debt faster, helping boost your credit score. 

Visit www.HughesFCU.org  to learn more on how Hughes can help. 

Andrea Elias is the Pantano branch manager at Hughes Federal Credit Union where she has served the Southern Arizona community for over 15 years.