Credit Score 101: What It Is & How to Improve Yours

Whether you’re planning to buy a car, apply for mortgage pre-approval, or get approved for a credit card, your credit score plays a vital role in your financial future. For major financial decisions like mortgage pre-approval, understanding your credit score is crucial. But what exactly is a credit score, and how can you improve yours? At TEG Federal Credit Union, we’re here to help you make sense of it all.

What is a Credit Score?

A credit score is a three-digit number that reflects your creditworthiness, or how likely you are to repay borrowed money. Lenders use this number to decide whether to approve you for credit, such as mortgage pre-approval, and what interest rates to offer.

Credit scores generally range from 300 to 850. Here’s a general breakdown:

• Excellent: 800-850
• Very Good: 749-799
• Good: 670-736
• Fair: 580-669
• Poor: Below 580

What Factors Affect Your Credit Score?

Credit scores are calculated using several key factors, including:

1. Payment History (35%) – Have you paid your bills on time?
2. Credit Utilization (30%) – How much of your available credit are you using?
3. Length of Credit History (15%) – How long have your accounts been open?
4. Credit Mix (10%) – Do you have a mix of credit types, like credit cards, auto loans, or mortgages pre-approval?
5. New Credit (10%) – Have you opened several new accounts recently?

Why Does Your Credit Score Matter?

A higher credit score can:

• Help you qualify for loans more easily, including mortgage pre-approval
• Secure lower interest rates, saving you money over time
• Influence your rental applications, insurance rates, and even job prospects

6 Simple Tips to Improve Your Credit Score

Improving your credit score takes time, but every positive step counts. Here are some tips to get started:

1. Pay Bills on Time – Your payment history is the most important factor. Set up reminders or automatic payments to stay on track.
2. Keep Balances Low – Aim to use less than 30% of your available credit. High balances can drag your score down.
3. Avoid Opening Too Many Accounts at Once – Each application can cause a small dip in your score. Only apply for credit when necessary.
4. Don’t Close Old Accounts – Length of credit history matters, keeping older accounts open can work in your favor.
5. Check Your Credit Report for Errors – Mistakes can happen. Schedule your Free Credit Report Review to take a deep dive into your credit score.
6. Work with a Financial Professional – If you’re feeling overwhelmed, connect with a TEG representative. We’re here to help guide you with personalized advice.

Stay on Top of Your Score with SavvyMoney

Want to monitor your credit score, get real-time updates, and receive personalized tips, all for free? TEG Federal Credit Union has partnered with SavvyMoney to help you take control of your credit.

With SavvyMoney, you can:

• View your daily updated credit score with no impact to your credit
• Receive customized tips to improve your score
• Get alerts about important changes to your credit report
• Simulate how actions, like paying off debt or opening new credit, may affect your score
• Access pre-qualified offers based on your credit profile

You can access SavvyMoney directly through Online and Mobile Banking, no extra logins or apps needed.

👉 Learn more about My Credit Score with SavvyMoney

Let TEG Federal Credit Union Help You Build Better Credit

Whether you’re starting from scratch or working to rebuild, improving your credit score is one of the smartest moves you can make for your financial future. At TEG, we offer tools and resources, from secured credit cards to personalized financial counseling, that can help you every step of the way, especially when seeking mortgage pre-approval.

Ready to take control of your credit?
📞 Contact us or visit your local branch to speak with one of our friendly team members today!

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