Financial Wellness Minute: Building a Credit Score

Get smarter about your money with this Financial Wellness Minute. I'm Jackie Formo, manager from the Fergus Falls Office of Mid Minnesota Federal Credit Union. This is a great time of the year to talk with the young adults in your life about credit scores. Starting to build a good credit score will be critical. A credit score is an indicator of financial health and can impact insurance rates, ability to rent an apartment, and even get a job. Not to mention getting a loan for school, a car or home in the future. Unfortunately, we all start from a score of 300 and need to build to a good score of 640 or better over time.

• A great place to start is to establish both an installment loan and revolving line of credit.
• An installment loan is a small loan that helps demonstrate that you can make your payments on time. You can get a loan like this by using money you have saved as collateral or look for a credit builder loan that doesn't tie up your savings.
• A revolving line of credit is a credit card. Start with a low amount, say $500, and only charge $100 worth of expenses each month. Then, pay it off right away.

By establishing these two types of loans you will be well on your way to building a strong credit score! You can learn more about credit scores, get personalized tips on improving your score, as well as monitor your credit with SavvyMoney, right from MMFCU's Online Banking or Mobile App. Want to know more or have a weekly financial wellness tip sent to you? Sign up below or, contact your local Mid Minnesota Federal Credit Union Office. Sign Up for a Weekly Financial Wellness Tip Mid Minnesota Federal Credit Union is federally insured by the NCUA and we are an equal housing lender.