Your credit score plays a big role in your financial life—from qualifying for a mortgage to getting the best rates on loans or credit cards. Understanding what affects your score and how to improve it can save you money and open doors to financial opportunities.
What Is a Credit Score?
A credit score is a three-digit number, typically between 300 and 850, that reflects your creditworthiness. Lenders use it to determine how likely you are to repay borrowed money on time. The higher your score, the more favorable your loan terms and interest rates may be.
What Impacts Your Credit Score?
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Payment History (35%)
Making payments on time is the single biggest factor in your credit score. Late payments, defaults, or collections can hurt your score. -
Amounts Owed (30%)
Your credit utilization—the ratio of credit you’re using versus your total available credit—matters. Keeping balances low helps your score. -
Length of Credit History (15%)
Older accounts with a positive history show lenders that you are responsible over time. -
Credit Mix (10%)
Having a mix of credit types, such as credit cards, auto loans, and mortgages, can boost your score. -
New Credit (10%)
Opening multiple new accounts in a short time can temporarily lower your score, as it may appear you’re taking on more risk.
How to Monitor Your Credit Score
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Check regularly. Many banks, including Neighborhood National Bank, offer tools to view your credit score for free.
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Review your credit reports. You’re entitled to a free report from each of the three major bureaus once a year at AnnualCreditReport.com.
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Look for errors. Mistakes on your credit report can hurt your score—dispute inaccuracies promptly.
Tips to Boost Your Credit Score
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Pay bills on time. Set up automatic payments or reminders to stay current.
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Keep credit card balances low. Aim for less than 30% of your available credit.
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Avoid opening too many accounts at once. Apply for new credit only as needed.
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Use a mix of credit responsibly. Credit cards, installment loans, and mortgages all contribute to your score when managed well.
How Neighborhood National Bank Can Help
Building and maintaining good credit is easier with the right tools and support:
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Credit Cards: Establish and build credit responsibly while earning rewards.
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Personal Loans: Use loans strategically to build a positive payment history.
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Mortgages & Home Equity: Show long-term responsible credit use while achieving your homeownership goals.
💡 Tip: Talk to one of our local banking experts about which products fit your goals and help you boost your credit responsibly.
Ready to take control of your credit? Connect with a Neighborhood National Bank expert today to explore credit-building tools and lending options.