New year new you...Getting financially fit...this is the post you need to read...Ever wonder what criteria goes in to the mysterious credit score that everyone caries around? Here are the 5 main components

Listen in as Lisa from Numerica Credit Union gives you the 5 factors that make up your credit score!


 Your credit score is used is for many parts of your daily life. Understanding what makes up a credit score is the first step in being able to repair it.

Pay bills on time = 35%

What’s the harm in being a day or two late? Well, it could cost you a lot more than you think. Late payments not only result in additional fees and potential rate increases, but they also ding your credit score. Even if you’ve had some serious delinquencies in the past, a recent history (24 months) of on time payments carries some positive weight. Making payments on time accounts for approximately 35 percent of your credit score, however this may vary between the three credit bureaus.

Know your capacity = 30%

When it comes to credit cards, know your limit. Your actual spending limit. It’s a good idea to keep 70 percent of your card balance free versus maxing it out. This helps increase what is known as your capacity and reflects positively on your credit score. The ideal point for card balances is about 30 percent of the spending limit, but that is a long-term goal and it may take some time to get there.

Don’t open a lot of credit at once (Number of inquiries) = 10%

Having a mix of credit cards and loans is actually a good thing. Getting a loan and two credit cards in the same month is not. Especially if you are just beginning to establish credit, opening multiple accounts can be risky. Not to mention, every time your credit is pulled you have a small dip in your credit score. These points repair themselves over time and is far outweighed by the positive points accrued by making payments on time. Take a moment to consider if saving 5 percent off that new pair of jeans for an in-store credit card is worth the dip in your credit score. You only want to lose the points when it’s really important.

Use credit but manage it responsibly

Length of history = 15%

This is how much time it has been since each account was opened.

Type of credit = 10%

Mortgages, auto loan, credit cards, etc.