Scoring Credit: Play It Smart

Jackie Allison, First Vice President, Retail Services 

Jackie Allison, First Vice President, Retail ServicesWhether you are requesting credit in the form of a credit card, car loan, or a home mortgage, it literally pays to have a winning credit score. The higher your score, the less you will pay over the life of the loan.

Who’s Keeping Score?
There are three main credit reporting bureaus:

  • Experian
  • Equifax
  • TransUnion

Each collects information in a report that summarizes your financial history. The bureaus use this information to calculate your credit score. Those scores are used by potential lenders to see if you are a “good credit risk,” someone who will likely pay back what they borrow, as agreed.

What Affects a Score?
While each bureau uses a different formula, they look at the same factors:

  • Whether you pay your bills on time. A late payment once in a while may not be damaging, but a pattern of late or missed payments is.
  • The amount you have outstanding each month as a percentage of your available credit. A high percent outstanding actually can lower your score.
  • The number of new credit applications you’ve submitted recently. This can signal a concern to the potential lender that you are acquiring too much new debt too quickly.
  • Payment history. If you have been late on a payment, get the account current and stay current. This will help improve your credit score.
  • The extent of your borrowing history. To have a credit score, you need to have had credit and demonstrated you can repay it. A good way to start building your history may be to have a parent co-sign on a loan application when you start working or, if you are able to do so, apply for a CD-secured loan at OSNB.

Before you apply for credit, take a look at your reports. You may request a free report once every 12 months from each bureau. To request your free reports, visit

Question any inaccurate information. And, if you are a joint borrower, exchange reports before applying. It may make more sense for the person with the higher score to apply for the loan on their own to lower its overall cost to you both.

If you do have a low score or a limited credit history, talk to us. Your banker can make suggestions that may help you raise it and lower your future borrowing costs. Because when it comes to your credit score, it’s never too late to improve it. For additional information, visit the FDIC’s consumer protection page.

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