Financial Wellness 101: Improving Your Credit Score

What goes into a credit score?

There are five main categories of information that impact your credit score:

1. Payment History: Whether you have historically repaid your debts on time. This section also considers bankruptcy, foreclosures, and any accounts that have been reported to collections agencies.
2. Amounts Owed: The amount of outstanding debt you have. The debt is assessed not just as a total dollar amount, but in relation to how much credit is available you. In other words, this section considers whether you have taken every dollar available as debt or have managed to keep availability on your credit lines.
3. Length of Credit History: How long you have had active credit accounts, as well as the age of your oldest and newest accounts.
4. Credit Mix: The types of accounts used. This evaluation considers various credit types including credit cards, mortgages, auto loans and personal loans.
5. New Credit: How many accounts have been opened recently. Too many new accounts opened too rapidly increases the risk of default on repayment of debt and therefore may be considered as a hit to the credit score.

Why are credit scores so important?

Credit scores are used to evaluate your financial risk. They’re used to determine creditworthiness when you want to take a loan, rent a property, buy insurance, apply for a credit card or even sign up for a cell phone plan. While the specific score requirements will vary depending on the creditor, the higher your credit score, the more likely you are to get approved for credit.

So, working toward enhancing your credit scores can greatly increase the chance that you are able to meet your financial goals and improve your quality of life.

How can I improve their credit scores?

Repayment history has a significant impact on credit scores, so this is a logical place to start. Kashable is an employee benefit that has been designed to make timely repayment seamless. Our low-cost personal loans are automatically repaid through payroll, so you can rest assured that you are always paying on time. Additionally, the funds you access through Kashable can be used to pay down other outstanding high-cost debts, helping you to catch up on overdue payments and meet future repayment timelines.

Kashable also reports loan repayment to all 3 major credit bureaus – over 50% of repeat borrowers saw their scores improve!

Ready to get started? Check Your Rate now at Kashable.com