March is officially National Credit Education Month! Our team at Great Basin FCU decided there couldn’t be a more appropriate time to talk about credit. Learn how to build and repair your credit with some credit education tips from yours truly!
Credit Score Education
Your credit score can seem like an arbitrary number, but that pesky three-digit number can have real consequences for your financial future. There are a few different agencies that calculate your credit score, so it will depend on which agency is used. So what does your credit score mean? Your credit score is a number associated with the borrower’s (your) risk. If a financial institution like a bank or credit union were to lend to you, how likely is it that you will pay a loan back in full and in a timely manner?
How do you know if your credit score is good or bad? Credit scores can usually range from 0 to 850, though credit scores will most commonly land between around 400 and 800. A good credit score is on the higher end of the spectrum, and a poor credit score will be lower. A credit score of 720-850 is considered excellent, and a credit score above 690 is good. If your credit score is below 690, this may indicate some credit problems such as late payments on a credit card or loan in the past or maxed out credit limits. A score of 350-650 indicates a damaged credit history, perhaps from a bankruptcy, collections, or a combo of many things.
Whether you have no credit history or a poor credit score, you can work to build up your credit score. It is possible to improve your credit score — it just takes some time and effort!
Building Your Credit
There are a few different tactics you can use to approach building or improving your credit. At Great Basin FCU, a great option for improving your credit is our ReBuild Together Loan, tailored specifically for young adults with no credit or adults with a damaged credit history.
This type of personal loan at Great Basin FCU is tailored specifically for credit union members with poor credit or no credit history at all. We lend you an amount between $1,000 and $3,000 for a term between a year and three years. The money we lend goes into a special savings account until you have made your payments to fulfill the loan. At the end of the loan term, you’ll have the money you paid in plus a good payment history on your credit.
Consider a ReBuild Together Loan for your 18-year-old to help him establish a good credit history before he even starts paying off student loans or getting high interest rate credit card offers.
Credit Education for Young Adults
It is much easier to learn about credit slowly but surely than to learn the hard way and hurt your credit score. At Great Basin FCU, education is one of our Core Values. Credit education for young adults matters to us at Great Basin FCU, so we spend a considerable amount of time on this topic. Our Youth Focus Committee travels out to schools to start the credit conversation in the classroom! Our team teaches kids about money, including topics like credit.