Consumers who check their credit score regularly are more likely to understand how scoring works than those who don’t, according to a new survey released by the Consumer Federation of America and VantageScore. The survey also reveals that, over the past four years, the percentage of consumers who have recently obtained their credit score has risen significantly.

Whether you’re intending to use your credit soon, or simply looking for ways to improve your own credit score, here are things you should know about that magic three digit number.

1. Missed payments can lower your score.

Did you know that if you miss a payment on your credit card, car loan, or student loans your credit score can go down? Payment history is one of the major components of your credit score. It’s 35% of your score to be exact. When you pay your bills on time each month, your credit score will gradually start to increase. If you miss payments or your bill is sent to a collections agency, your score will decrease. Try and elect into auto-pay (when your payment is auto withdrawn from your bank account). This can alleviate any missed payments in the future and you don't have to kick yourself for being forgetful! It's a win-win.

2. Keeping a high credit card balance lowers your score.

Yes, carrying a high credit card balance month to month can harm your credit score. Credit utilization is the percent of your credit limit that you use each month, and your credit utilization ratio is a key component of your credit score. Try and keep your credit card balance under 30 percent of your overall credit card limit. For example, if you have two credit cards that each have a limit of $500, your total available credit is $1,000. In this instance, you will want to keep your balance below $300, or 30 percent.

A large credit card balance can also feel overwhelming to pay down. When you aim for a low balance and pay your bill in full each month, you get a fresh start each billing cycle. And the best part –you won’t have to pay any interest on your purchases!

3. Checking your credit report will not change your score.

Annual check-ups on your credit reports will make sure they are error-free and won’t impact your credit score. This can be done for free each year at www.annualcreditreport.com. They’re going to ask for some pretty personal information, but they do that to ensure it’s truly you who is requesting the report. Be sure to shred the report when you’re done with it, or keep it in a safe place.

Additionally, many financial institutions will let you check your credit score online for free. When you regularly monitor your score, you can see how your financial decisions are impacting your credit potential. If a financial institution is pulling your credit information to make a lending decision, those are hard inquires and can lower your score by a few points. Too many ‘hard’ pulls like this can look concerning to other lenders, so make sure you time the inquiries appropriately. For example, if you’re in the process of applying for a mortgage, it’s probably not a good idea to take out a car loan and apply for a credit card at the same time. 

Credit karma, Credit Sesame, and many of the budgeting apps are free for you to use and will provide your personal credit score and information. You should never pay to view your credit score!


There are many other factors that can impact your score, but these are some of the big ones. If you have any questions about some of the above information, don’t hesitate to shoot us an email or call us at our office 515-294-0677.


Keep on building those credit scores!