Credit Score 101

April 13, 2019

You may not want to disclose your number publicly, but your credit score effects many of your most important business transactions. There's a lot of confusion about this triple-digit rating, so we're here to help you understand your score.

You may be pleasantly surprised to find your number is high, and you have a lot of reasons to keep it that way. But, if your credit score is low, you may be asked to pay a deposit before you can rent an apartment or get a mobile phone. Or, you may pay a higher interest rate for credit cards and loans or be denied altogether. And, you may not be able to get an apartment or a car or home loan.

About Your Score

Using information from your credit reports, credit bureaus calculate the score that is shared with companies and organizations you do business with. Learn how to get your free credit report annually. You have many types of scores, but the most important takeaway is the calculation method for the scores.

Your payment history is the most important factor. In addition to avoiding late fees, paying your bills late even once or twice can have a major impact on your score.

The amounts owed compared to your limits is another very important consideration.

Lenders have more confidence in consumers who have a longer credit history. It may seem counterintuitive, but don't close accounts you have paid off.

Having different types of credit -- credit cards, car loans, home mortgages, student loans -- demonstrates you have managed various debts.

You should limit credit bureau inquiries and the number of new accounts. If you have too many dings on your record, this appears to be a sign of money problems.

Raising Your Score

If you need to raise your score, it may take some time, but you can repair your credit. Set reminders on your phone or use the Guaranty mobile app to make sure you pay bills on time. Pay your debt down as soon as possible. When shopping for a big-ticket item such as a car or home, ensure that businesses understand you have not yet authorized a credit inquiry.

Guaranty Bank & Trust is one of the oldest and most respected banks in Texas, and we are here to serve you with any planning you would like to discuss with us. To learn more, come into a location today, visit us online, or give us a call at (888) 572-9881.

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