Have you viewed your credit score in the past year? You’re not alone if you answered no. 

Only 33% of Americans check their credit score annually, according to Lendingtree.com.  

The Local Home Loan Experts at UnitedOne Credit Union discuss what makes up your credit score and how to improve it in the latest edition of their podcast, At Home on the Lakeshore. 



If you’re not obtaining your free credit report from AnnualCreditReport.com each year then you could be in for an unpleasant surprise when you apply for a loan. 

One in five consumers have mistakes on their credit reports, and one in 20 had errors significant enough to cause them to be denied lower interest rates. 

“It’s important to check annual credit report every year to see what’s out there,” said UnitedOne Mortgage Specialist Linda Serrano, NMLS # 441416. “We can give you tips on disputing some of those items because maybe it’s that one item that’s going to get you that credit score that you need.” 

Understanding the five components that make up your credit score is essential for improving your overall creditworthiness. 

• 35% Payment History 
  The most significant element in determining your credit score is paying your bills on time. 
  
  “Late payments can really negatively affect your score,” said UnitedOne Mortgage Specialist Kari Johnsrud, NMLS # 441414. “Even if you can only make the minimum payment, that’s OK just pay it on time.” 
   
• 30% Credit Utilization Ratio 
  This is the amount of credit you're using compared to your total available credit. For example, if you have $900 charged to a credit card with a $1,000 limit, you’re using 90% of the available credit on that card.  
  
  Maintaining a low credit utilization ratio, ideally below 30%, demonstrates responsible credit management and can boost your score. 
   
• 15% Length of Credit History 
  Generally, a longer credit history reflects more experience managing credit, which can positively impact your score. 
  
  “Let’s say a credit card that you opened in 2000 and then now you closed it, that actually eliminates all that credit history,” Serrano said. “If you can avoid it, it’s better to keep it open and put a charge on it every once in a while and pay it off so you can have the longevity of your credit.” 
   
• 10% Types of Credit 
  Not putting all your eggs in one basket helps when it comes to your credit score.  
  
  Having a variety of credit types, whether it’s cards or loans, demonstrates your ability to manage different financial obligations responsibly. 
   
• 10% New Credit Inquiries 
  It can be tempting to open new lines of credit when there is an offer associated with it, like getting a store’s card to obtain a discount. 
  
  However, opening multiple new credit accounts within a short period can negatively impact your score, as it may suggest financial instability.  

By understanding the components of your credit score and implementing responsible financial habits, you can take control of your creditworthiness and work towards achieving a higher credit score. 

“If you’re going to buy a house, come see us early in the process so we can pre-approve you and look at your credit report to see if there are things you can work on before you’re ready to buy that house,” Johnsrud said. 

Whether you’re in the market now to buy a home or want to learn more about improving your credit score so you’ll be ready to house shop in the future, UnitedOne’s team of Local Home Loan Experts are your trusted source in Manitowoc and Sheboygan for all your home loan needs. 

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