Your Credit Score

Your Credit Score is the real-time scorecard of your credit. As with a report card in school, you can affect your credit score by actions you take that will drive your score (grade) up or down. When you know what those actions can more strategically affect your credit score in both the short and long-term. 

What's in a Name?  Sir Isaac Newton formulated the laws of motion & universal gravitation; he was an expert in the ups & downs of gravity & temperatures. Fair Isaac established the credit score model that goes up and down. According to Fair, Isaac and Company (FICO), the creator of the three-digit score used to rate your borrowing risk, the higher the number, the better your credit score. The FICO score ranges from 300-850. So, what is considered to be a good credit score? A good credit score is typically in the range of 720-740 and above.

Credit Score Factors Your credit score is made up of 5 different factors the combination of which will impact your score in various ways. 

1)   35% Payment History  This is a record of your payments, on all accounts, for the length of the account(s) history.

2)   30% Total Available Credit  This is what makes up your credit utilization ratio. To determine your utilization ratio, take the amount of outstanding balance you have on each account and divide it by your total credit limit on that account. A credit card with a $5,000 credit line, that has $3,000 in used credit, would be a 60% credit utilization ratio – not so good. If you are in good standing with your credit cards, you may be able to receive a credit level increase. Increasing the maximum cap on the credit extended to you, will proportionally make your existing balance a smaller percentage of the total credit available to you on that card - this positively affects your credit score.

3)   15% Age of Credit History  This considers the number of years you have been borrowing. The longer your credit history of positive payments and responsible account management, the better.

4)   10% Type of Credit  This includes all types of credit, such as installment loans, revolving accounts, student loans, mortgages, etc.

5)   10% Credit Inquiries  Every time you apply for a new credit card or loan product, a hard inquiry is reported on your credit report. Hard credit inquiries can each affect your credit score from about 4-10 points. You would want to limit the number of hard inquiries, particularly in a 30-day period, as your score updates monthly with each credit bureau.

Inconsistency All scoring models are not the same, therefore, a your score may be different and may change in different ways among the 3 major credit bureaus; TransUnion, Equifax and Experian. Furthermore, everyone’s score is affected in different ways, even when taking the exact same actions; due to each person's historical patterns of payment, credit use, types & levels of credit extended verses utilized, and other variables.

Get A Good Score! Constantly keep tabs on your credit score & credit reports, your accounts & payments, and the balance of levels of the various credit extended to you verses the amount of credit you are using of that which is extended to you (Use a lower percentage of total credit extended to you on each account. Pay on time and pay more than the minimum due each month.). With this knowledge, you can take steps to manipulate your credit in your favor. Now that you understand what factors make up your score, what can damage it and how you can improve your score... you can proactively affect your score to your advantage.

Credit score reports & disclosures use 'reason codes' you may not understand. To get a simple explanation of what these codes mean, go to to enter a 2-digit &/or text-based reason code from your credit score report or disclosure notices.  To learn how to get your credit report see the articles below.

Good Credit

Its a fact. Whether you like it or not, we all need to have established credit; good credit. Without credit, and without good credit, you could unknowingly be punished in important areas of your life.
Employment  A lot of potential employers check the credit report of job applicants (applicants' social media accounts are also checked...but that is another story). If a credit search shows that you do not have any credit, it is a red flag that could prevent you from getting the job.

Insurance & Loans  The same thing happens when you are shopping for auto insurance or a home. If you do not have credit, or if you have bad credit; you will have to pay higher rates on insurance, and on loans...if you can get one.

However  If you know that you will not manage your debt responsibly (max credit cards out, not pay the bills on time, etc.) it would not be in your best interest to open lines of credit... stick to cash.

#Goal  Credit you use to make purchases on a credit card is in fact, a loan. Your credit card interest rate is the interest rate you are paying on that loan. So, if you plan to carry a credit card balance month to month, as a borrower/credit card holder, your goal is to pay the lowest interest possible on any credit that is extended to you; through credit cards and loans. Know Your Rates! 
      WCTFCU Pro-Tip: Visit to use our 6 online Calculators and calculate the best rates for your credit-style:
        + Debt Consolidation Calculator
        + Credit Card Debt Reduction Calculator
        + Loan Comparison Calculator
        + Auto Loan Calculator  & Auto Refinance Interest Savings Calculator

Shopping! When shopping, if you get a 30% discount on an item you purchase with your credit card, but you are paying 29% APR in interest each month on that purchase, as you carry it from month to month within your credit card balance... you've not only lost the original 30% discount... you are now actually paying far more for your original item... you are just paying it to your credit card company now, not the retailer.

Rewards!  If you pay your credit card(s) total balance due each month, then you are in a position to benefit from a rewards card (consider the WCTFCU Visa Platinum card with ScoreCard Rewards from 8.5% APR).

How to Select A Credit Card

Make a Good Match!
 It is important to select the right credit card for your personal financial profile. Before you apply for a credit card based upon a special offer or visions of using points to get those amazing golf clubs or tour the world; do a financial a reality check. Consider your current and near-future debts, income, savings goals, spending profile and how you pay your debts.

Select the type of credit card that best suits your purposes:

Get Out of Debt & Improve Your Credit Rating     Get a card with the lowest permanent interest rate, and no fees. This way, more of your payment goes directly to pay down the principal balance due, rather than paying a higher percentage of your total payment towards the interest you owe on your balance -which would drag out the repayment time on your debt. "But, I want to earn points." When you have debt, this is not the time to think about earning rewards points. Reward yourself when you have eliminated your debt! Make regular and additional payments, on a low interest rate no-fee card, and take advantage of special offers. This is how you eliminate your debt and, in turn, improve your credit score.
  • The WCTFCU Visa Gold Credit Card has rates from 8.00% APR and no fees. Open a new one and take advantage of the 2.99% APR interest rate (for 12 months) on all credit card debt transferred in, during the first year. With NO Transfer Fees.
  • WCTFCU runs a credit card balance transfer special offer from time to time. During the promotional period, Members can transfer credit card debt to their existing WCTFCU Visa card, pay NO Transfer Fees, and pay a very low rate (ex. 2.99% APR) on the transferred balances for a set term (ex. 12 months). After the term for the transferred ballance(s) ends, the interest resumes at the flat rate for the Member's WCTFCU Visa card (as low as 8% APR).

Earn Rewards On Purchases   Make sure you select a fair-exchange points card. Fair exchange of points earned on purchases, and fair exchange for points necessary to select your reward-item(s). You can't get something...for nothing. If you are getting rewards on your credit card purchases...How is the card company is making back the money on giving you those rewards points? Is the interest rate higher? Is there an annual fee? Is that annual fee higher than the cash-value on the rewards you would earn? Is there a reasonable exchange rate of points for items?
  • The WCTFCU Visa Platinum Credit Card has rates from 8.50% APR offers ScoreCard Rewards Points on all purchase. Additional special bonus offers include double and triple points for select purchases during promotional periods, such as triple points on all gas & grocery purchases. No opt-in necessary.

I'm A Student    With a simple card that offers low rates and no fees, a student can learn how to responsibly develop, manage and use their credit, while incurring as few costs as possible. The student can easily learn how to link their checking account to their credit card in order to make payments from their mobile phone.
  • The WCTFCU Student Visa Credit Card has a $2,000 cap. Card holder must be at least 18 years old, and enrolled in college/university to apply.

Calculate your Debt  Our Credit Card Debt Reduction Calculator is safe and easy to use. 

Compare Cards Which card suits you best? Compare the 3 low-interest WCTFCU Visa Credit Cards using the easy chart.  

Apply Online  Complete a quick, secure & easy online Application for the WCTFCU Visa Credit Card that best suits you.

Avoid Identity Theft - Protect Your Credit

With Equifax’s catastrophic 2017 security breach, along with various retailers' frequent data breaches, now is a really good time to consider freezing your credit, if you haven’t already.

Credit freezes are one of the most effective ways for consumers to protect themselves against identity theft — this goes for anyone at any time — regardless of whether you were impacted by this specific breach. It is imperative that you freeze your credit with all three main credit reporting agencies: Equifax, Experian and TransUnion.

HERE is a link to a quick and complete reference guide that includes steps to take in order to put a freeze in place with each bureau, followed by more information on the process of how/when to thaw your credit, links to each credit bureau and more.

What is a Credit Freeze?  A credit freeze allows you to seal your credit reports and use a personal identification number (PIN) that only you know and can use to temporarily “thaw” your credit when legitimate applications for credit and services need to be processed. The added layer of security means that thieves can’t establish new credit in your name even if they are able to obtain your personal information.

Freezing your credit files has no impact whatsoever on your existing lines of credit, such as credit cards. You can continue to use them as you regularly would even when your credit is frozen.

Freezes have been available for free to victims of identity theft for some years, but recently all three of the major credit bureaus adopted new rules that now allow non-victims to have access to credit freezes as well, for a small fee ($3 - $10/ea). This fee may soon be eliminated, and credit freezes will be free of cost, if the US Senate passes the proposed banking bill in late May 2018.

Below are the numbers to the major credit agencies:
Equifax: 1-800-349-9960
Experian: 1-888-397-3742
TransUnion: 1-888-909-8872

Source: edited from original by Clark Howard 12.4.17 Credit Freeze Guide: The best way to protect yourself against identity theft

3 Steps for Financial Success

Whether you have plans to buy a home, pay off debt or build your savings for long-term stability, a little planning can go a long way in ensuring you are successful.

Here are the top three steps you can follow in order to get your finances in order:

Step 1: Check Your Credit - frequently!

Go to to download your credit report from each credit bureau for free, once per year. (Tip: Stagger your free download allocation across the 3 credit bureaus, across the year in order to have a free report at 3 different times in a 12 month period.) If you haven’t checked your credit in the past twelve months, use this opportunity to review the reports. This will help you understand where your credit stands and if you have any negative items, such as missed payments, that could be decreasing your score. Reviewing your credit will help you plan ahead, particularly if you plan on applying for a new loan or credit card. Credit score reports & disclosures use 'reason codes' you may not understand. To get a simple explanation of what these codes mean, go to to enter a 2-digit &/or text-based reason code from your credit score report or disclosure notices. 

Step 2: Review Your Debts

Be proactive! Check the current balance and APR of your debts, loans and credit cards. If you have credit card debt totaling more than $5,000, consider a credit card balance transfer to a WCTFCU Visa Credit Card (as low as 2.99%APR on transferred amount to new Visa card, no transfer fees!). 

You can consolidate your debt with a lower-interest rate loan. If you owe more than $10,000 talk to a WCTFCU Loan Officer about taking a personal debt consolidation loan or discuss with them, the options for using your existing equity, if you are a homeowner. Lower rates can lower your monthly payment and reduce the total cost of paying off your debt. Check out our Debt Consolidation Calculator, and Credit Card Debt Reduction Calculator, and Loan Comparison Calculator.

Step 3: Your Budget

Review your Spending; How do you spend your money? Ideally, you should only spend about 75% of your take-home income. That gives you plenty of free cash flow to cover unexpected expenses. 

Set up your budget. With a WCTFCU Checking Account you can use the Budgeting Tool to label each transaction you make from your account. Make sure you have a WCTFCU Savings Account with direct deposit of  your paycheck, so you can begin separating your savings from your cash-flow, before it all gets spent! If possible, start by saving about 5-10% of your income each month. Siphon it off to a Saving Account to stash it away. Set targets to reach and reward yourself! To hit your goal, work savings into your budget as an expense– like a bill that must be paid. This will help ensure that you save money consistently throughout the year.

Source: edited from original @

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