Marshfield Medical Center Credit Union > Financial Literacy > How to Improve Your Credit Score
credit score banner

A credit score is a number that depicts a consumer’s creditworthiness. Ranging from 300-850, a credit score is based on credit history, including number of open accounts, total levels of debt, and repayment history.

In this Q&A, Jerry Litwaitis, VP of Lending, shares why a credit score is important, how a credit score can be used, and advice on how to improve a low credit score.

Q: Why is a credit score important when someone is applying for a loan?

A: If a financial institution is using risk based lending, then your credit score will have a direct impact on the interest rate that you receive.  The higher your credit score, the better interest rate you will receive.

Q: Why do you, as a lender, look at credit score? 

A: It can give us a quick snap shot of what our members credit report will look like.  If you have a low credit score, then most likely there has been late payment issues with your current or past debt.  The credit score is not the only underwriting item we look at when approving a loan, it is part of the bigger picture.

Q: What advice would you give people with no credit score?

A: Get a credit card, use it to purchase everyday items such as gas and groceries and then pay the balance in full each month.  This will help to establish a credit history and credit score.

Q: What advice would you give people with a low credit score?

A: Make your loan payments on time.  Do not take out additional debt unless it is used to consolidate your current debt load.  The only way to increase your credit score is with timely loan payments.  It will take some time, but eventually your credit score will increase.

Q: What general advice would you give someone looking to improve their score?

A: See Above.  Also, steer clear of derogatory credit (making late payments, collection actions, judgments, filing for bankruptcy).

For more information, contact MMCCU at 715-387-8686.

Leave a Reply