3 Things Your Credit Score Needs

Good morning Dinks.  Do you ever wonder what your credit score is?  What it does or why you should care about it?  Truth be told I never cared.  Yes it’s true I was a financial planner and I never cared about my credit score.  In my 20s I already had several credit cards so I didn’t need a more credit and I was renting a great apartment so I didn’t need to be approved for a mortgage.  I didn’t pay any attention to my credit score because I didn’t need more credit.  I didn’t want a number to define me and my financial life so I just didn’t bother with it.

You may not think about your credit score, but it’s there

That would have been all fine and dandy – extremely naive – but fine and dandy if my life would have stayed as it was, but then the market crashed and everything changed.  My stable, well paying job in financial sales suddenly stopped providing income, I couldn’t afford my apartment and I stopped making payments on my credit cards because I had no money.

Contrary to what I wanted my credit score became the thing that defined me, it was a direct reflection of my financial worthiness.  Over the last few years my score has gone from extreme lows to being to average to being among the top 15% of all credit holders.  That’s a big accomplishment.  As my life got back in order with a new job in marketing, a new apartment and automatic biweekly payments to pay off my debt my financial life got better too.

Always keep your credit score in mind

I went from not caring about my credit score to using it as a measure of how I was getting my life back on track.  I ordered my full credit report with credit score every year to see how I compared to others across the country.

I liked to see my good payment history on all my credit cards, I liked to make sure all my personal information was being reported correctly and I liked to see the number of my credit score continuously increase every year.  Admittedly my credit score didn’t go up as quickly as I would have liked it too but TransUnion gave me tips to help rebuild my financial worthiness aka my credit score.

3 tips to rebuild and keep your good credit score:

Your loan balances are too high in comparison with your loan amounts. High levels of debt can signal to potential lenders that you are spending more than you can afford.  Keep your balances below 35 percent of your available credit limits.

Your revolving account balances are too high in comparison with your credit limits.  If you have balances above 35-50 percent of your available credit limit, you could see your credit score start to drop.

Not enough of your accounts have been paid as agreed. Payment history is a significant factor in the credit scoring process. Regular on time payments make you appear more stable and creditworthy to potential lenders.

Kristina Tahnyak

Tahnya is a Certified Financial Planner and former Investment Advisor turned marketing and communications professional She holds a degree from Concordia University, is debt free and currently works in the field of digital marketing.