4 Tips for Healthy Credit

Once again, summer has flown by and the back-to-school season is upon us. The start of a new school year is exciting, but it can also be stressful for parents to manage the added expenses of supplies. In fact, parents will spend an estimated $510 per household on school supplies this year, according to a survey from Deloitte that analyzes back-to-school buying trends.

Here are four tips for healthy credit:

1. Understand the components of a credit score.
   Healthy credit is more than just the rate you pay on a credit card. Your credit can affect your ability to purchase a home, send your child to college and plan for retirement. FICO scores are used in over 90 percent of U.S. lending decisions, so understanding how this number is calculated is an important step to improving and managing the health of your credit.

2. Aim to only use 30 percent of your available credit.
   Using more than 30 percent could negatively impact your score. Keep in mind that most credit card companies report your outstanding balance as of the statement closing date. Paying your bill in full each month prior to the statement closing date will help keep your utilization down and your score up.

3. Be careful not to close out your older credit accounts.
   Closing older credit accounts could decrease the reported length of your credit history and negatively impact your credit score.

4. Be mindful when submitting multiple credit applications.
   If you are considering a large purchase such as a car and will be submitting multiple credit applications, try to do so within two weeks to avoid having multiple inquiries impact your credit score.

By Ashley Stevens, Performance Consultant
Courtesy of CUNA Mutual Group