Improving your credit could be easier than you think

COLUMBUS, Ohio — March is Credit Education Awareness Month.

Many central Ohioans are struggling with debt as inflation and the cost of living continue to rise.

Total household debt increased by $93 billion to reach $18 trillion by the end of 2024, according to the Federal Reserve Bank of New York. The Fed reported that credit card balances increased by $45 billion, reaching $1.21 trillion by the end of December.

10TV spoke to Rob Brunette with the Outlook Financial Center about ways to maintain or improve your credit score.

10TV reporter Bryn Caswell: "For those who may not know, what's considered good credit versus bad credit?"

Brunette : " Most people look at good credit as what their credit score is. So, a good score is probably 740 or higher. That's when you start getting to the better offers. But the idea behind good credit is to look at how you arrived at that score as well. If you pay your bills on time, creditors really like that. If you've got a long credit history, they like that as well. One of the things I see people losing points on their credit score from is they've got too much debt on credit cards and things of that nature."

Caswell : "If someone is suffering from low credit scores, what can they do to improve it?"

Brunette : "Well, the first thing you want to do is go look at the credit bureaus and see if the credit bureau has everything reported correctly. If there are errors on the report, you might want to dispute them. I would encourage that. All the credit bureaus have that process available to them just to make sure what's being reported on you is, in fact, your report. Second thing is most people may or may not be aware is you can go to the three major credit bureaus once each year and get a complete credit report. It's not going to give you a credit score, but it's going to show you everything that's listed on there. It's going to show you your payment histories and what your credit balances are and have been. So it will provide you a lot of opportunities to look at, OK, what do I need to go look at and work on?"

Caswell : "What else should people be doing to keep their credit in good standing? I have heard that having a little bit of debt is actually healthy and beneficial to your credit score."

Brunette : "That's correct. If you're only using some of your credit, let's say you've got $50,000 available credit through various credit cards and things of that nature, is if you're using less than $5,000 of that $50,000, that's under 10%. That's going to be scored very favorably. And if you want to be able to get, you know, one of the things I encourage people to do too, if you've got a couple of credit cards, use them for specific purposes. You know, I'm going to use this one for food. I'm going to use this one for travel or buying gasoline. That's a great way for a young person to also build initial credit to have a focused purpose."

Caswell : "A lot of people don't like talking about money. It's a very sensitive subject, but why is it so important to have these open discussions about credit and overall financial literacy?"

Brunette : " You need to understand how the system works, and not that you can game the system, but understand how it works. There are so many people in different businesses that started using credit scores. Insurance companies have started using them. Obviously the credit card companies, but if you're trying to get a mortgage loan, they're going to be looking at your credit score. All of them are looking at what is your ability to repay. That's what they're looking at. And the longer your credit history showing this person's paid all of their bills on time. That plays very, very well both in your score and in the eyes of the credit bureaus."

Improving your credit could be easier than you think

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