Knowing your credit score is the first step toward taking charge of your financial future. Whether your concern is maintaining good credit or remediating bad credit, you need to start by knowing your score and understanding how it can affect you. The three credit bureaus have partnered to create the next generation of credit score — the VantageScore® 3.0. And AutoPayPlus is proud to offer customers access to this critical piece of financial information plus credit monitoring and instant alerts from TransUnion®.
A New and Improved Financial Future
The VantageScore 3.0 credit score was created to be more consistent, accurate, predictive, and inclusive as a measure of consumers credit worthiness relative to the old scoring system. If you ever noticed that your old score varied a lot when you checked it with more than one credit agencies, you’ll probably like the fact that VantageScore 3.0 credit score was designed to be more uniform. This was accomplished, in part, by the fact that the data used to create the models was derived from the three credit reporting agencies themselves.
Additionally, the new scoring system now provides the ability to score tens of millions more credit worthy individuals whose profiles were not able to be scored within the old framework.
With access to VantageScore 3.0 credit score you can be a more educated and confident consumer when it comes to making decisions about your credit. Did you know that your credit score not only affects your access to credit products, but also how much you’ll end up paying to use them in terms of your interest rate? If you’re shopping for a new house, for example, it would be wise to check your credit score and report before getting too far along in the mortgage application process. There may be inaccuracies weighing down your score that could be corrected, or other steps you can take to raise your score and help you qualify for more desirable loan products at lower rates. The same holds true whether you’re applying for a student loan, personal loan or even new credit cards.
VantageScore 3.0 credit scores range from 501-850. Higher scores are intended to be more predictive of consumers who will likely pay back their debts in a timely fashion. Individuals with lower scores are generally considered to have a greater risk of late payments or default. To make the model more relatable, a letter grade (A-F) is provided to help you understand how your credit worthiness is viewed relative to others.
A number of factors are taken into consideration when a consumer’s credit score is calculated:
- Payment History. VantageScore 3.0 credit score considers your past record of on time payments to lenders. Having more on time payments in your history will ultimately help your credit score.
- Total Balances/Outstanding Debt. The total amount of debt that you owe to lenders.
- Credit Account History. Higher scores will be assigned to consumers whose profile demonstrates an established credit history. This means that closing older accounts may actually hurt your score.
- Recent Credit Behavior and Inquiries. When you apply for new credit and that lender performs a hard inquiry, this will cause a small decrease in your score, so apply for new lines of credit judiciously. You also want to avoid opening too many new accounts too quickly.
- Types of Credit: Aim for a balanced mix of credit accounts and loans.
What Additional Steps Could I Take to Improve my Credit?
TransUnion recommends obtaining copies of your credit report and score on a regular basis to monitor activity on your account. In addition to staying on the lookout for any inaccuracies, look for any types of credit use behaviors that could negatively impact the factors listed above. For example, if you are using more than 35 percent of your available credit, take steps to lower it by paying down some of that debt. In addition, TransUnion recommends guarding against late payments by using automatic bill payment.
www.autopayplus.com can help consumers in both of these areas. With AutoPayPlus, a biweekly loan payment schedule can be created that divides your regular monthly loan payment in half and then debits that amount from your account every two weeks. The end result is that you’ll accumulate two extra half-payments each year that will be applied to your loan balance. This can help you shave months off the time it takes to pay off your car loan and lower the amount of interest you end up paying over the life of the loan. By using an automated system, you’ll also avoid credit-damaging late payments and the fees that go with them.
If you take advantage of adding more loans with no additional upfront costs during your six-month open enrollment period, you can save money and accelerate the payoff of all kinds of loans including: home mortgages, car loans, student loans, boat loans, personal loans, credit cards and more. And as an AutoPayPlus customer, you’ll not only have online access to your VantageScore but many other helpful resources and tools including free credit monitoring, Kelly Blue Book® pricing on your enrolled vehicles and more.
Our loan services take the legwork out of setting up an accelerated payment schedule. We make sure that all loans are paid on time every time and that your extra payments are being correctly applied to principal, which is essential in order for you to realize the maximum benefit in interest savings.
Credit is often needed to achieve many of the things we want most in life — buying a home or car, going to college, having children and family vacations. Your good credit is the key to a brighter financial future and it’s important to take steps to ensure your credit is the best it possibly can be. Knowing your credit score can be an important first step down that path to financial freedom. And at AutoPayPlus, we’re committed to walking that path with you.