Ask the Experts: How to Improve Your Credit Score

Whether you’re looking for tips on how to build your credit or ways you can improve your credit score, our Retail Loan Officer, Melanie Hornibrook, is here to help! In this month’s “Ask the Experts,” we’re answering four questions about how to improve your credit score during National Credit Education Month this March.

1. How do I create a budget that will improve my credit score?
An easy way to create a budget that will help improve your credit score is to make a list of all of your monthly payments for expenses, such as your:

  • Mortgage
  • Auto loan
  • Credit cards
  • Utilities
  • And more 

Make sure you allot funds from each paycheck so that you can cover the payments for all of your bills in a timely manner. To make this even easier for you, BHCU offers a great iSAVE Savings account product that can specifically help members achieve not only their financial goals, but also their monthly budget goals.

2. Does paying my utility bill on time really matter?
Yes! What some people are unaware of is that paying your utility bills on time can greatly  help with improving your credit score. Utility bills include: 

  • Cable bill
  • Water bill
  • Heating bill
  • Electric bill

When these are not paid in a timely manner, the companies can actually put a collection account on your credit report in an effort to collect the balance owed. Because collection accounts can significantly decrease your credit score, when you’re looking to improve your credit score, remember that paying all utility bills on time can make a huge difference.

3. What is one factor that can affect my credit score that isn’t obvious?
Parking tickets! What do parking tickets have to do with your credit score? Well, in the past, some townships have put unpaid parking ticket balances on credit reports as collection accounts. These collection accounts have dropped consumer credit scores for even the smallest parking ticket balance. If you do receive a parking ticket, be sure to pay the fee right away with the proper city or township — this will save you from possibly hurting your credit score. 

4. Can my car loan impact my credit score?
Yes. In fact, one of the hardest hits a credit score can take is when people shop for a car. Dealerships tend to run your credit through 5 to 10 different financial institutions, which means your credit is being pulled 5 to 10 times in the same day! Although the salesman does this to provide you with a wide variety of loan options, it can cause a significant drop in your credit score. Avoid this by knowing what your credit score is before you go shopping, and ask the dealership to run your credit score through only one financial institution (preferably the one with the lowest rate). Or, join BHCU, your Delaware County Credit Union! We partner with several local auto dealers, so you can ask your salesman to put your loan through BHCU electronically, which will guarantee you one of the lowest auto loan rates in the area.

5. Do retail store credit cards change a credit score?
Absolutely. While some store cards may offer benefits, if you’re looking for how to build your credit score, you’re going to want to beware of applying for too many retail store cards. Typically, stores will run a hard hit on your credit when you apply, which causes your score to drop. Also, although you may save 10% on your purchase, most store credit cards have a rate of over 20%, so you could potentially end up paying MORE than you originally would have. Instead, opt for basic credit cards that offer a low rate, such as BHCU’s Visa credit card. Or better yet, try our iSAVE credit card, which has a low rate, 1% cash back and no annual fees! 

If you still have questions about how to improve your credit score, the financial experts at BHCU in Delaware County, PA are always here to help! Contact BHCU today, and our team members will be happy to help you.