If you’re a true beginner, you might not know exactly what a credit score is. In the simplest terms, it’s a three-digit number, usually ranging from 300 to 850, that shows how likely you are to repay borrowed money. It’s calculated based on your past financial behavior, including payment history, the types of credit you use, and the amount of debt you carry compared to your credit limits. Recent applications for new
credit are also factored in.

Your credit score is important because lenders, landlords, and even some employers will consider it before approving you for loans and contracts. If you’re applying for a mortgage, for example, your financial institution will use your credit score to determine your interest rate and loan terms. Generally, a higher credit score means a lower rate, because there is less risk that you will miss payments based on past financial behavior. Remember, a credit score is primarily used to measure risk.

Here’s how to gain control of your credit score and keep things moving in a positive direction.

Understand Your Progress

To take control, start by identifying your current credit score. You’re entitled to free reports from each of the three major credit bureaus (Experian, Equifax, and TransUnion) once per week at AnnualCreditReport.com¹. The federal government recommends this resource for safe and accurate reports.

When you get your report, review it for errors or suspicious activity. This can protect you from identity theft and make sure you’re not penalized for mistakes outside your control. Correcting an error can sometimes boost your score.

To improve your score further, focus on using credit responsibly. A secured credit card, which requires a deposit, can help you establish a payment history. Over time, having a mix of credit types, such as secured and unsecured loans, can strengthen your profile. You don’t need every type of credit, but keeping up with payments is what matters most. A healthy mix can still work in your favor. You can learn more about Affinity’s loan options on our website².

Keep Up with Payments

The first and most important habit for building healthy credit is paying your bills on time. Even one missed payment can cause noticeable damage to your score, and it can take months to recover. Setting up reminders on your phone or using autopay can help you stay on track. If you can’t pay the full amount, make at least the minimum payment to avoid late fees and credit damage. Remember, partial progress is better than none.

Carrying a high balance on credit cards and loans can also bring your score down, even if you eventually pay it off. Aim to use less than 30 percent of your available credit at any given time. For example, if you have a $1,000 limit, try to keep your balance below $300. Paying your balance before the billing cycle closes, even if you plan to pay more later, can help you maintain a healthier ratio.

Simplify Your Financial Life

If you have too many accounts, it can be harder to manage debt. Gather information on all your cards and accounts, close the ones you don’t use, and consolidate where possible. A mix of credit lines and loans can help your score, but only if you can keep up with them.

Each time you apply for credit, a “hard inquiry” is added to your report, which can temporarily lower your score. Opening multiple accounts in a short time can make lenders cautious. Start with one or two accounts, and add more later if you really need them.

Slow and Steady Wins

There’s no quick fix for a weak credit score. Improving your standing takes consistent, reliable habits built over time. The most important thing is to make smart day-to-day decisions and reward yourself for progress along the way. If you’d like some extra support, reach out to one of Affinity’s Certified Wellbeing Coaches³ for help.

This information is for informational purposes only, is intended to provide general guidance, and does not constitute legal, tax, or financial advice. Each person's circumstances differ and may not apply to the specific information provided. You should seek the advice of a financial professional, tax consultant, or legal counsel to discuss your particular needs before making any financial or other commitments regarding the matters related to your condition.

¹ Retrieved from: https://www.annualcreditreport.com/index.action
² Retrieved from: https://www.affinityfcu.com/personal-banking/borrow/loan/
³ Retrieved from: https://www.affinityfcu.com/financial-wellbeing/certified-wellbeing-coaches