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What's in a Credit Score?

Nearly half of Americans don’t know their credit score. Many others can’t give you an accurate definition of a credit score.  A credit score is a number that basically represents your financial life. Businesses and lenders use this score to determine if you are trustworthy enough to lend you money.

Credit scores aren’t just used by lenders. Employers pull credit during the interview process. Apartment owners check your score before they’ll let you move in your couch. You can’t even rent a car without a credit score. If it’s that important, why don’t more people keep up with it?Cost2016_blog.jpg

We can’t answer that question. We can give you the information you’ll need to better understand your credit score.

Like we said, a credit score is a numerical expression of a person’s credit worthiness. The actual score is derived from your credit report. Credit reports are maintained by the three major credit bureaus: Experian, Equifax, and Transunion. Your score can differ from bureau to bureau based on what information they decide to capture and when. A FICO score is the most widely used by lenders.

FICO credit score is made up of the following elements:

  • Payment History
    • Makes up 35% of your FICO score
    • This refers to the timeliness of payments for your current debts.
    • These debts include credit cards, mortgages, student loans and auto loans.
  • Amounts Owed
    • 30% of your FICO score
    • How much money do you owe on your loans and credit cards?
    • Maxing out your credit lines makes you look less financially stable.
  • Length of Credit History
    • 15% of your FICO score
    • Credit History factors in the amount of time you have had credit lines and accounts.
    • Recent account action is also considered.
    • Building good credit takes time. It’s impossible for someone with brand new credit to have a perfect score.
  • New Credit
    • 10% of your FICO score
    • Borrowers see someone who opens too many credit lines in a short period of time as risky.
    • FICO suggests only opening one credit line every 6 months.
  • Credit Mix
    • 10% of your FICO Score
    • Lenders see people who can maintain payments on different types of loans as less risky.
    • The mix refers to the different types of loans such as credit cards, auto loans, mortgages, etc.

Credit scores can be anywhere from 250-850. A good score will be above 650. Many lenders will not consider you for any loans if your credit score is below a 650. If you’d like to take a look at your credit report, go to annualcreditreport.com. You can pull your report once a year for free! If you’d like help reading this report, don’t hesitate to bring it into our branches. We would love to help you better understand your credit or get your low score back on track!



The credit union is federally insured by the NCUA. Additional insurance of up to $250,000 on your savings accounts is provided by Excess Share Insurance Corporation, a licensed insurance company.
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