PurposeBank
PurposeBank
Skip to main content

All PurposeBank and VisionBank locations will be closed on Thursday November 24th in observance of Thanksgiving. You can still take care of your banking needs through PurposeBank online, your mobile app or by stopping by any of our conveniently located ATMs.

Strange But True

Posted on June 22, 2022 at 9:47 AM by Danielle BrownWolf

Confusing things about your credit score

Your credit score is a huge part of your life. Yet, for something that is so important, it can be quite confusing. Here are some things about your credit score that may not be common sense to you.

30 Days Matters a Lot

You’ve likely heard that late credit card payments are a killer for your credit score. They are; but only if they’re 30 days late or more. As USA Today notes, if you pay your bill anywhere from one to 29 days late, it is considered on-time when it comes to credit. You might get charged a late fee, but this likely won’t hurt your credit score. However, if you pay your bill 30 days past its due date or later, your credit score could go down by up to 110 points.

Sometimes More is Better

One big chunk of your credit score is your credit utilization ratio — your total credit card balances divided by the credit limits. The lower that ratio, the better. Therefore, having more credit cards, and thus credit available to you, can actually help your credit score.

Paying Off a Loan Can Hurt

This might be the most puzzling part of credit scores. If you pay off a loan, it could hurt your score. There are two reasons for this. First, your credit history helps your score. The longer you’ve been paying off items on time, the better for your score. If you pay off a loan, especially one you’ve had for years, that account disappears from your file and you have less credit history. The other way paying off a loan can hurt your score is that maintaining a credit mix helps your score. It’s better to have loans and credit cards than just one or the other. If you pay off your loan, your mix suffers, and potentially your credit score.

 

 

This article was originally posted on savvymoney.com 

 

The material provided on this page is for informational use only and is not intended for financial, tax or investment advice. VisionBank, PurposeBank, and/or its affiliates assume no liability for any loss or damage resulting from one’s reliance on the material provided. Please also note that such material is not updated regularly and that some of the information may not therefore be current. Consult with your own financial professional and tax advisor when making decisions regarding your financial situation.

Categories: Credit

© 2022 VisionBank of Iowa. All Rights Reserved.