News & Advice

Credit can be referred to as a person’s financial reputation. It shows how well you are paying borrowed money and meeting your financial obligations. Lenders use credit scores to determine your ability to borrow and pay as agreed. Think of your credit report as a financial report card that lenders review to help determine what you may be eligible for.

A credit report is a statement that shows both your historic and current credit activity. Credit bureaus collect and store financial data about consumers. The three main credit bureaus are Experian , Equifax, and TransUnion. This report comes from credit unions, banks, other lenders, creditors, and public records such as judgements, tax liens, foreclosures, and bankruptcies.

According to an article from Consumer Financial Protection Bureau, a credit score is a prediction of your credit behavior, such as how likely you are to pay a loan back on time based on information from your credit reports.¹ The credit score ranges from 300-850. A higher score makes it easier to qualify for a loan and may result in a better interest rate or loan terms. Each credit bureau uses a different scoring model and therefore you have three credit scores, one from each bureau.

How your credit history can open doors:

• Better chance of qualifying for loans.
• Lower interest rates.
• Access to higher credit limits.
• Save money on insurances – some states allow insurance companies to use credit-based insurance scores to help determine premium rates.²
•  Easier rental application qualification.
• Job opportunities.
• Lower utility security deposits.

How your credit score is calculated:³

• 35% payment history
• 30% owed or credit utilization
• 15% length of credit history
• 10% credit mix – variety of accounts
• 10% new credit – counts recent hard inquiries and new accounts openings
• Are these bullets from something that should be quoted??

How to maintain or increase your credit score

• Pay your bills on time - Payment history is one of the biggest factors in building strong credit.
• Keep credit card balances low - Try not to use too much of your available credit.
• Avoid maxing out your credit card - Leaving some room on your cards can help your credit profile.
• Check your credit report regularly - Reviewing it helps you spot errors or suspicious activity.
• Apply for new credit only when you need it - Too many applications in a short time can affect your credit profile.
• Keep older credit accounts open when possible - A longer credit history can work in your favor. Apply for a credit builder loan with INOVA Federal
• Freeze your credit - A credit freeze helps protect you from identity theft by preventing new credit accounts from being opened in your name without your permission.

INOVA Federal offers a free monthly credit score report from Experian through digital banking.

Credit is more than a number — it is your financial reputation. It can open doors to opportunities or make life more expensive if not managed well – it’s all up to you. Credit mistakes are not permanent. With consistent habits and responsible choices, anyone can rebuild and strengthen their financial future.

Your credit history does not need to be your credit future! Your credit ability is your credibility and INOVA can help.

Please click here to schedule one-one financial empowerment session at no cost to you.

Bookings with me - Samuel Kamwenji - Outlook

¹ https://www.consumerfinance.gov/ask-cfpb/what-is-a-credit-score-en-315/

²https://content.naic.org/article/consumer-insight-credit-based-insurance-scores-arent-same-credit-score-understand-how-credit-and-other-factors

³https://www.fidelity.com/learning-center/smart-money/how-is-credit-score-calculated