Sep 12, 2023

For many people, the phrase “credit score” causes anxiety. You may even know what yours is, but you might not know how important that score is for your financial health. Credit scores have several components, many of which you can manage with some careful planning. Here are a couple of tips on how to handle your credit score so it accurately reflects your financial health.

Be cautious opening and closing credit accounts:

Before opening or closing a credit account, think about how it might affect your score. While there are a wide variety of accounts (credit cards, personal loans, and home equity lines of credit, etc.), opening more than you can manage could lead to late payments and fees, negatively impacting your score.

Additionally, closing credit accounts will eliminate your credit history on that account — diminishing your score regardless of consistent on-time payments. If you choose to open a new line of credit, be aware that it could drag down your credit age, which indicates to lenders how long you have had experience with credit.

Make on-time payments:

Your payment history, or how reliably you make on-time payments, is an important factor in calculating your credit score. In fact, timely payments account for 40% of your score, respectively. This information shows potential lenders how likely you are to pay them back should they choose to lend to you. Consider using automatic bill payments or setting up alerts to avoid missing deadlines.

Regularly check your score:

Reviewing your credit score on a regular basis could help you when it’s time to borrow money for a big purchase like a new car or house. Consumers are entitled to receive a free copy of their credit report from all three reporting agencies once every 12 months. To request a copy, visit or call 877-322-8228.

Cinfed offers My Credit Score — a FREE service to members to help track and manage their reports. My Credit Score provides the same data for which many services charge a fee or subscription. Simply log into your Cinfed Digital Banking account and register at no cost.

Dispute errors on credit reports:

When reviewing your credit reports, keep an eye out for any activity you don’t recognize. Immediately contact the credit reporting company and lender or credit card company that provided the information. Additionally, checking your reports and disputing potential errors can help prevent identity theft and catch a potential fraudulent new account before it’s opened.

If you believe an error exists in your report, the Federal Trade Commission recommends sending a detailed letter with copies of all relevant documents via certified mail to your lender or credit card company.

Your credit score can play a pivotal role in your personal finances and can greatly impact your borrowing power, so it should be managed accordingly. Using a dependable resource like My Credit Score can help; members can also talk with a Financial Coach at their nearest Cinfed location.