First Bank of the Lake: How To Maintain Your Credit Score

What's your credit score?

If you are preparing to take out a loan for a house, boat, car, or other big purchase, you probably know what your credit score is. If you have not shopped for loans in a while, you may have no idea where your number currently falls. Either way, you are probably well aware of the importance of having a good credit score. Today, First Bank of the Lake is here to examine how you can maintain your credit score.

How Your Credit Score Works

Before discussing how to maintaining a line of credit, here is a quick refresher on how your credit score works. Credit score models vary slightly by credit bureau, but generally your credit score will be a number ranging anywhere from 280 to 850. The higher your number, the more trustworthy or "creditworthy" banks assume you to be, and therefore the more likely you are to secure loans with the best terms and the lowest interest rates. You may also be offered lower insurance premiums and utility costs. You can build a strong credit score by paying all your bills and loan payments in full and on time.

Maintaining Your Credit Score

Think of your credit score like a garden: if you water and weed it regularly, it will continue to grow and flourish. If you leave it to its own devices, it probably won't do as well. Fortunately, maintaining your credit score is simple; all you need to do is keep making the payments on your debts and utilities on time and in full.

What Happens If You Don't Have Any Debt?

Most people dream of someday living a debt-free lifestyle. While being out of debt is certainly a laudable goal, it may be wise to still keep a line of credit open somewhere, such as utility bills, phone bills, or a credit card.

The reasoning is simple: in order to show potential lenders that you are a trustworthy borrower, you have to have a strong history. Showing that you have repaid debts in full is wonderful, but it can also become problematic if you don't have any other lines of credit open at the time that you begin shopping for a new loan or applying for a new credit card. Lenders and credit card companies are sometimes reluctant to rely on past performance alone; they often want to see something to assure them that you are still a reliable borrower in your current situation.

Remember First Bank Of The Lake For All Your Banking Needs!

At First Bank of the Lake, your financial success is our top priority. If there is anything we can do to help you improve your financial situation, we would be honored to be of service. We are proud to offer a variety of services to meet your personal and business needs, including checking accounts, loans, and money market accounts. For more information about our banking services at the Lake of the Ozarks, call us at 573-348-2265.

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