Money Matters: How small things can affect your credit score

April 7, 2017 01:30

Sponsored by NEFE

Your credit score is not a static number. It changes all the time, based on your debt, your spending, how you're paying your bills and more. Along with your debt, your payment history and your overall credit history, there are other factors than can make your score change, including opening (or just shopping for) new lines of credit, as well as the mix of different kinds of credit you use. Another part of the score is based on how much of your available credit you're using. If you're nearly overextended, it could be warning sign to current and potential creditors that you might miss a future payment. Each time someone inquires about your creditworthiness, it can slightly affect your score in the short term.

As outlines, it's not uncommon for people's scores to fluctuate ten or 20 points in a month. If you shop around for a new credit card and open a new account, your score may temporarily drop because you're in the market for new credit. But if you use that new credit card and pay it off quickly, your score could rebound fairly quickly, because you're making timely payments and you're using less of the total credit available to you. In other words, your efforts to seek new credit can be offset by using it properly and lowering your overall utilization of credit.

To help your viewers/readers/listeners learn more about credit scores, talk with lenders in your market who work with credit reports all the time, and can talk about the factors they consider when approached with a request for a loan. They can explain some of the key things that can improve your credit score and give you the best chance at securing a loan or line of credit in the future.

Sponsored by the National Endowment for Financial Education
For more personal finance story ideas, click on the banner below:

Thema Ponton of WISN-TV entered the 2016 NEFE/RTDNA awards contest with a story about economic growth, job opportunities and strategies to improve job prospects in the state.


EIJ19 register now