Each time you apply for a loan, credit card, or mortgage, the lender will pull your credit score and report. Your three-digit credit score helps lenders determine how likely you are to default on a loan. It also plays a role in deciding how much they can lend to you and at what terms. Besides lenders, your landlord, cell phone provider, and utility company might look at your score. They could view your credit score to determine the amount of your security deposit or your payment plan.
Learn more about the financial moves that could increase or decrease your credit score.
Increasing your credit score is a great idea because a better score could help you get a lower rate on loans, which means you can save money over time. And it may be possible to access a greater amount of loan funding because a good credit score shows lenders that you’re able to manage your bills and your debt responsibly.
A few moves that could increase your credit score and the reasons for a potential increase include:
These financial moves show that you have experience managing diverse payment amounts and due dates and that you’ve established positive relationships with different financial institutions.
There are a few financial moves that may cause a slight drop in your credit score. These moves aren’t necessarily bad, they just indicate to lenders that you’re making some changes. And though the changes may be beneficial to your financial wellbeing overall, the slight drop in your score is a signal to lenders that you’re either trying to expand your access to credit or that your financial situation has changed and you may be taking on too much debt.
The following actions could cause a slight decrease in your credit score:
Oftentimes, after making one of the moves above, the slight drop in your credit score is temporary and your score recovers quickly.
If your financial situation suddenly changes (like after a job loss) or if you are struggling to pay your bills, it’s important to connect with your lenders, financial institutions, and other companies you make payments to in order to come up with a manageable payment plan. Your credit score will likely decrease by several points if your bills start piling up.
These actions will likely cause a decrease in your credit score:
If you have loans at Lake Trust, remember that you may be eligible for Skip-a-Pay. Skipping your monthly loan payment could free up funds for an emergency or other essential expense. You can apply for Skip-a-Pay by signing in to Online Banking and submitting a request. Or call us at 888.267.7200 to speak to a team member.
A major decrease in your credit score could make it difficult to borrow funds in the future and limit your access to loan options. Again, if you’re experiencing a financial hardship, whether a major or minor hardship, it’s important to work with your lenders and notify them. Many lenders can work with you to create a manageable payment plan for your situation.
These financial events will greatly impact your credit score:
If you have loans at Lake Trust and don’t think you’ll be able to make your payment, please call us at 888.267.7200 so we can discuss your individual situation.
Remember, if your credit score is not where you want it to be, you can make changes and continue working on this financial goal. Each major credit bureau (TransUnion, Equifax, and Experian) is required to provide at least one free credit report (not a credit score) to you every 12 months upon your request. This is an easy way to monitor what bills, loans, and payments are impacting your credit. Visit annualcreditreport.com to request your free credit report.
If you see an inaccuracy on your credit report, you’ll need to contact the lender that’s reporting the inaccuracy and work with them to fix it. Or contact the credit reporting agency directly for assistance.
You have the power to take your finances in your hands. To work toward your goals. And make an impact on your future.