October 1, 20227 Habits of People with High Credit Scores

Upon reaching adulthood, your credit score is one number that can dramatically impact your life, both financially and otherwise. A good score can help you receive the loans you need and ultimately pay less interest. But it can also help when applying to lease an apartment; some employers even check your score before hiring.  

While a good credit score is desired, it isn’t always easy to obtain. Life throws everyone curve balls that knock their financial plans and budgets off track. So how do you build and maintain the high credit score you desire? Below are seven habits commonly found among those with high credit scores.  


1) Maintain Low or $0 Credit Card Debt  

Credit cards are one of the most convenient payment methods today. The ability to “buy now, pay later” helps with financial emergencies as well as everyday cash flow. But it’s that convenience that also makes credit cards one of the easiest financial tools to abuse. Consequently, credit cards also play a significant role in your credit score.  

Ideally, you should repay your entire credit card balance each month. If you cannot accomplish this feat, maintain a relatively low balance. Doing so will help you avoid paying costly interest expenses and help improve your credit score.  


2)  Only Borrow When Necessary  

Loan and credit card offers are all around you – from your mailbox and inbox to TV and the internet. While it may be hard to avoid seeing these offers, you can control whether you take advantage of them or not. Just because you qualify for a loan or new credit card doesn’t mean you should apply. Instead, only apply for new credit when it’s necessary.  


3)  Check Your Credit Report & Score Regularly 

Thanks to many free apps and websites, checking your credit score today is easier than ever. But your credit score alone shows only half the picture. While monitoring your credit score regularly helps you know where you stand and learn how your financial actions impact your score, it can be limiting.  You should always monitor your credit score and report.  

Each year you’re able to obtain a free copy of your credit report from the three major credit bureaus (Experian, TransUnion, and Equifax) at www.AnnualCreditReport.com. In addition, one of the features of PEFCU’s mobile banking app is the FICO score, which you can access anytime.  


4)   Strive for a Low Credit Utilization Ratio.  

Your Credit Utilization Ratio, or CUR, is a figure used by lenders to determine how well you manage credit. Your CUR is calculated by dividing your total credit card balances by your total credit limits and multiplying that number by 100. Lenders like to see this number below 25%. Excellent credit scores often have CURs below 7%. We explain in detail in our article, “4 Reasons Your Credit Score Changed.” 


5)  Follow a Budget.  

Budgeting can play a significant role in maintaining and building your credit score.  Following a budget helps to ensure you have the funds available to make your loan payments and other financial obligations on time. Failing to do so will cause a drop in your score, and late or missed payments can remain on your credit report for up to seven years. Using our free Bill Pay feature can help you pay your creditors on time; it’s electronic and free! 


6)  Build an Emergency Fund.  

Saving a portion of your monthly income in an emergency fund is essential. Should unforeseen costs arise, such as medical expenses or car repairs, you’ll be able to rely on those funds instead of borrowing more money and potentially lowering your credit score.  

Work to build an emergency fund between three to six months’ worth of your living expenses. While this may seem significant, you’ll be prepared if something dramatic happens, such as a job loss. Read “5 Ways to Build Your Emergency Fund” for guidance.  


7)  Live Within Your Means.  

Credit cards make it easy to spend – even when you know you don’t have the money to repay the balance quickly. While this can add up, cause financial stress, and lower your credit score, it’s not the only way people live outside their means.  

When applying for loans, such as home or car loans, you will be approved for a specific amount. Just because you’re approved for that amount does not mean you need to borrow all of it. Excess spending on homes and vehicles is an easy trap to fall into – upon seeing the max amount to borrow, people often feel they need to spend that amount.  


We’re Here to Help! 

Building an excellent credit score doesn’t happen overnight. It requires ongoing effort and dedication. However, its impact can be significant when it comes to receiving loans and determining how much you will pay for those funds.  

If you’re interested in learning more ways to build your credit, we’re ready to help. Please stop by any of our convenient branch locations or call 1-800-226-6673 to get started today. 


Everyone’s financial situation is unique, and readers are encouraged to contact PEFCU when seeking financial advice on the products and services discussed. This article is for educational purposes only; the authors assume no legal responsibility for the completeness or accuracy of the contents.  

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