Military Life April 25, 2019

Time for a Checkup of Your Financial Health: Your Credit Score

Heather M., Editor

How’s your financial health? Military Saves Week is over for another year, and whether you took part in any activities at your installation or not, it’s important to be actively involved in your finances every week, year-round.

Saving money for future needs is the ultimate goal, and your use of credit is a huge factor in how much money you can put aside for yourself and your family every month.

“Credit” Is Not a Dirty Word

Your financial health depends on how you handle credit. Don’t fall into the trap of overspending and getting deep into debt. Instead, use credit wisely and you’ll see this reflected in your credit score.

Having a good credit rating means it will be easier for you to get loans with low interest rates. Getting a low interest rate usually means you’ll have lower monthly payments – and that means you can save more money every month!

Your Credit Report

First, get a copy of your credit report. Take a good look at it. Make sure the information is accurate, complete and up to date.

You can get a copy of your report directly from any of the three consumer reporting companies: Equifax, Experian and TransUnion. If you find a mistake in your credit report, tell the consumer reporting company (in writing) what information is wrong.

Did you know? Identity thieves may use your information to open a new credit card account in your name. Then, when they don’t pay the bills, it can affect your credit rating. Information like that could affect your ability to get a loan, mortgage, insurance or even a job.

The All-Important Number: Your Credit Score

Know your credit score and what it means. Credit scoring is a lender’s method of determining whether to give you credit and how much to charge you for it. Your score helps predict how credit-worthy you are – how likely you will repay a loan and make the payments on time. As your information changes, so will your score. Each month, as you pay your bills, open new accounts or close old accounts, your score changes.

Enjoy the benefits of a good credit score:

  • You’ll get approved for loans faster.
  • More credit will be available to you.
  • You’ll get better interest rates.

How to Improve Your Financial Health

You can improve your credit score, but not overnight. You’ll have to work at it and you’ll have to be consistent.

Some tips to improve your credit score:

  • Pay your bills on time. Do it consistently, over a long period of time.
  • Don’t carry high balances. How much you owe could be just as bad as paying your bills late.
  • Establish a good credit history. Generally, the longer you’ve been managing credit, the higher your score.
  • Avoid applying for credit if you don’t need it. Each time you apply for credit, an inquiry is made on your account. Each time an inquiry is made on your account, it’s logged on your credit report and it affects your score.
  • Don’t close your accounts just to improve your score. Closed accounts don’t disappear from your credit score.

April is Financial Literacy Month, a time to learn more about your finances. Lots of helpful information is available at and the Consumer Financial Protection Bureau. The FINRA Foundation is also a good resource, with information and financial tools geared toward Service members. Check out their “For the Military” menu for topics such as credit and debt, as well as everyday finances, transition and retirement.

For more information on various financial topics, browse the QuickSeries® library of guides, including 10-Step Spending Plan and Becoming Debt-Free.

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