A credit score is just a number between 350 and 850 - but it's an important number, according to Greg Newsom, branch manager of United Credit Union in Fulton.
"Building credit is one of the biggest things people ask us about," he said at a seminar Tuesday morning given at the Callaway County Chamber of Commerce. "We talk to a lot of people who have credit issues, and we spend lots of time talking to people about building credit."
Newsom said clients can have good credit, bad credit, formerly bad credit and "colorful" credit. But with the right steps and time, even a detrimental credit history can be repaired.
"There's no quick fix to fixing credit," he cautioned. "Scores can drop pretty quick, and it takes a long time to rebuild. People can get frustrated."
Many factors go into determining credit scores. The lower the score, the harder it is to get good rates on credit cards, car loans and insurance, and even a mortgage, so it benefits people to pay attention. One way to improve credit scores, Newsom said, is to pay loan payments on time.
"If you pay 30, 60 or 90 days late, it will be reported to the credit bureaus," he said, adding one missed payment isn't the end of the world if it's a rarity.
The length of time a person has a credit account also factors into scores. Often, a credit card has more impact on a credit score than a car loan that has an end date.
"Part of your score has to do with the average age of the loan - all the years of history," Newsom said. "You can have the same credit card your whole life. The credit card can be huge for building your credit."
But don't open lots of credit accounts - the amount of new credit is detrimental compared to the amount of old credit. While a person may be tempted to shift a credit card balance to a new, lower-interest credit card, eliminating the old credit card can damage a credit score.
Newsom also cautioned against borrowing money frequently; that shows prospective lenders you can't live on your income.
"Try to get in the habit of saving money," he said.
Another red flag is the amount you've charged versus the amount of credit available on a credit card. Newsom said maintaining large balances on cards hurts credit scores. Keeping the balance under 20 percent is best.
"That shows you have restraint," Newsom said.
When you pay off a credit card, don't be quick to close that account.
"When you close that card out, it shrinks the average age of your credit," Newsom said.
Newsom was joined by Arica Alton, marketing coordinator at the credit union. She said when people have problems with high medical bills, call the billing person, explain the problem and make payment arrangements.
"Then (the past due amount) won't be reported to collection," she said.
Officials at the credit union are happy to talk to clients about how to shape up their scores and prepare to purchase a home.
Sometimes financing for a home for people with credit scores in the mid 600s can be found, Newsom said. Time in a job or the same field of employment counts for a lot, as does the length of credit history.
People can check their credit for free once a year from each of the three credit-reporting agencies, as well as on creditkarma.com or annualcreditreport.com. Newsom said when people check their own credit records, it doesn't count as an inquiry and doesn't hurt their credit like an inquiry might.
The seminar was part of a week-long series of events at the Chamber, which culminates with Friday's health fair.