Do You Really Know the Score? Three Important Credit Tips

Areas where consumers showed the largest decline in correct answers included:

  • Knowing that a low credit card balance helps raise a low score or maintains a high one (85% answered this correctly in 2012, only 66% of respondents got it right in 2019)
  • Realizing that opening several accounts at once can affect a credit score (83% in 2012 versus 62% in 2019)
  • Recognizing that consumers have more than one credit score (78% in 2012, 62% in 2019).

While the average American’s credit score has gone up to around 680 according to credit bureau Experian, many people do not realize that fair or poor scores can impact every aspect of their lives.

Here are some important credit tips:

Pay Your Bills on Time – pay at least the minimum amount by the due date. Paying even a day late can impact your credit score, and the late payment will stay on your credit report for seven years! The good news is that even if you miss a payment, every subsequent on time payment helps your score improve.

Pay Down Your Credit Cards – The amount of debt you carry on your credit cards is the second most important factor in determining your credit score. Keep your debt to credit ratio low, ideally below 30%. For example, if your credit card has a $10,000 limit, and you are carrying a $5,000 balance, then you have used 50% of your available credit.

Don’t Apply for Credit You Don’t Need – As tempting as a free gift or a percentage off on your purchase might seem, don’t apply for lines of credit that you don’t need because every time you apply for credit is counted as a “hard” inquiry that will impact your credit score. Checking your own credit score, however, is a “soft” inquiry that will not affect your score.

Credit scores not only affect the interest rate on loans and credit cards, they can also impact your insurance premiums, your utility deposits, your rental applications, and perhaps most importantly, your security clearance.

Service members who take the Military Saves Pledge can get a free FICO credit score courtesy of the FINRA Foundation. Installation family readiness centers also have Personal Financial Managers and Counselors who can assist with pulling and interpreting credit scores.

Tip of the Day

  • Written by Guest Blogger | May 2, 2014

    33% of Americans spend more than they earn. The first step to eliminating #debt is to stop borrowing & make a budget.

Saver Stories View all »

How Smart Financial Decisions Can Create Opportunities 

Written by | November 22, 2019

Written by Stephen Ross, America Saves Program Coordinator | November 22, 2019

Of the many stories Military Saves shares, most describe how someone was in dire straits financially and worked their way out of it with the help of Military Saves. This time we want to highlight a different kind of story. This is a story about how responsible financial decisions can build on one another to create opportunities you thought only the super-rich enjoy.

Read more...

Building a Six-Figure Savings While Enjoying Life

Written by Jackie Toops | November 13, 2020

Does the idea of saving up hundreds of thousands of dollars seem impossible? How about doing it while still living an enjoyable lifestyle?

For military spouse Martina and her husband, an E-5 in the Navy, accumulating a six-figure savings has become a reality. One might think that in order to save this much, it would take a great deal of sacrificing and forgoing a certain quality of life, but Martina and her husband would disagree. “Over the past few years (about five), we've managed to save almost $120,000 while mostly living on one income. We've learned so much about easy ways to save money and live a good life,” shares Martina.

Read more...

Making Saving Automatic Leads to Personal Success

Written by Lila Quintiliani | May 27, 2020

Ryan’s savings journey started when he was an active duty airman. Frequent deployments and temporary duty assignments gave him the opportunity to save. By the time he transitioned out of active duty, he had built up a healthy rainy-day fund and had started to aggressively save for retirement.

Read more...