Having a sound credit score can build bridges from where you are to where you want to be. “Your credit score can impact everything from loan approvals, getting utilities and your credibility with potential employers,” says Randie Sue Luersen, Personal Banker with Fifth Third Bank. “Understand that having credit is a privilege, not a right. When you learn about the factors that compose your score, you can help ensure you don’t do anything to accidentally damage it.”

Five contributing factors
The following five factors are used to calculate your credit score:

• Payment history may include your mortgage, credit card and automobile payment record. “Make sure you always pay your bills on time, even if you can only pay the minimum amount,” Luersen advises. Remember – late or skipped payments could lead to a drop in your credit score and blemishes remain on your credit report for up to seven years.
• Amounts owed looks at your debt to credit ratio. For example, if you have $5,000 in credit card debt and a $10,000 credit limit, you are at 50 percent utilization. Most financial professionals agree that it’s best to keep your debt to credit ratio as low as possible. “We recommend keeping it no higher than 10 to 15 percent,” says Luersen.
• Length of credit history analyzes credit users over the long haul. “Typically, accounts that are 24 months or older are looked upon more favorably than new accounts,” says Luersen. “Older accounts, such as a ten-year mortgage, add more points to your credit score.” Older accounts are rated more highly because they demonstrate your ability to establish and maintain credit accounts over time.
• New credit evaluates the number of accounts you’ve recently opened. It is also based on the number of newer accounts versus older, established accounts. Keep in mind that when you apply for new credit accounts, your score may take a dip. “Any time you run a credit application for a credit card, points are automatically lost,” says Luersen. The exception is when your credit is pulled while you are shopping for a mortgage or auto loan – as long as you stick to a 14-day window, your score will not be negatively affected.
• Types of credit factors in the different forms of credit you use, which may include loans, credit cards and retail accounts. It’s important to have a diverse mix of credit because it helps establish that you have a record of responsibly making payments of several types of accounts. “An ideal mix includes a revolving line of credit with an installment or mortgage loan,” Luersen says.

Fifth Third Bank offers individualized advice, Identity Alert
Fifth Third Bank can help if you have questions about your credit or need advice for improving it. A financial professional can help you evaluate your credit report and create an individualized plan to achieve your goals. Fifth Third Bank also offers Identity Alert, which provides you with unlimited access to your credit reports from the three main credit bureaus. This service allows you to monitor your credit and provides instant notifications if there are any changes to it or if someone tries to access it. “Fifth Third Bank is here to help guide you to an excellent credit rating,” Luersen says. “We’ll help you make smart decisions that positively impact you long term.”

To learn more about your credit score, contact Fifth Third at (866) 475-4201 or visit 53.com.

All loans subject to credit review and approval.