Your Credit Score and You

A credit score is your financial reputation. It gives lenders a way to decide whether they want to do business with you and how that business will look. Learn the different components of a credit score, ways to improve it, and how to get your free credit report at least once a year.

A credit score is a way for lenders to decide whether they want to do business with you and how that business will look. Credit scores range from 300 to 850 – the higher the score, the better your credit offer will be. For example, a score of 740 typically puts you in good shape to receive the best credit offers available. Because your credit score is vital to your financial progress, let’s take a look at the components that make up this score.

Components of Your Credit Score

The following are the five components that make up your credit score:

  1. Payment History. 35% of your score is based on how you’ve made payments on your outstanding debt in the past. Because this percentage is so high, it’s critical that you make consistent, on-time payments on all the credit you have, including credit cards, student loans, auto loans, and mortgages. Late payments will hurt your credit score.
  2. Credit Utilization. 30% of your credit score is determined by the amount of debt you have relative to your available credit (or your credit utilization ratio). The lower the utilization ratio (using less than 30% of your available credit), the better your credit score will be. For example, if you have a credit card with a $1,500 credit limit, and your balance is $1,300 or more, that may negatively affect your score.
  3. Credit History. 15% of your score focuses on how long you’ve maintained credit. The longer you’ve established credit, the more data is available to base an opinion on your creditworthiness. That’s why it’s important to establish credit as early as possible.
  4. Credit Mix. 10% of your credit score addresses the different types of credit you have – both secured and unsecured credit. So, if you have multiple credit cards and no other loans, your score will be lower than if you have a few credit cards, an auto loan, and a mortgage loan. Plus, when you have the right mix of credit, you’ll show your ability to repay multiple types of credit.
  5. New Credit. 10% of your score is based on how often you open new credit accounts. Opening (or attempting to open) multiple credit accounts in a short time may harm your score. 

Review Your Credit Score Annually

Everyone has the opportunity to obtain a copy of their credit report each year by visiting And between now and April 2021, you can get your free credit report weekly to stay on top of your credit score. Take time to review your report to ensure everything is accurate. If you see something is wrong, or you don’t understand something,  contact one of the credit bureaus immediately, or call us at (405) 755-1000 for assistance. The sooner you take care of any credit issues, the better. You may actually improve your score by merely getting something fixed on your report.

Improve Your Credit Score

To improve your credit score, consider paying down your debt, committing to paying your credit on-time, and avoiding getting new credit accounts. Getting into a better credit situation may take some time, but it’s worth the effort. Once your score is where you want it to be, you may consider refinancing your existing loans, such as your auto loan or mortgage, to maximize your savings.

Your credit score is your financial reputation. To learn more about how we can help you improve your credit situation, call us at (405) 755-1000. For more information about loans available at QCB, click here.