Unlock the Power of Your Credit Score in 2024

As we head into the last few weeks of 2023, we want to help your account holders get a jump start on becoming more financially fit in the new year by talking about credit scores and how important it can be in achieving financial freedom. This month, we are focusing on credit scores: what they are, how they are calculated, and how they can be improved. Only once they understand how credit scores work can they begin to move toward their financial goals.

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Unlock the Power of Your Credit Score in 2024

A credit score might seem like a mysterious three-digit number, but it holds significant influence over your financial life. Whether you're applying for a loan or a credit card, renting an apartment, or even setting up utilities, your credit score plays a crucial role in the decisions that lenders, landlords, and service providers make. As we look forward to the beginning of 2024, you can get a head start on a resolution to be more financially fit in the new year by learning about credit scores and what you can do to make a positive impact on yours. 

What Is a Credit Score? 

Simply put, a credit score is like a grade for how good you are at managing money. It is one of the most important tools that lenders and financial institutions use to assess the risk of lending money to you. A higher credit score indicates a healthy credit history, therefore, a lower credit risk, making you more appealing to potential creditors. Credit scores typically range from 300 to 850, with higher scores being better, indicating that you have consistently made payments on time to satisfy your credit obligations. While a "good" credit score varies based on the lender and the specifics of the loan request, it is typically around 700 or higher. Once your score is over 760, you may expect to be offered the best available rates. Credit agencies refresh scores once a month, but the exact timing of those updates may vary based on a myriad of factors.

How Is a Credit Score Calculated? 

You might be surprised to learn that you can have multiple different credit scores at the same time. Based on where the lender obtained their data (from one, two, or all three credit reporting agencies), the credit score model that is used, the lenders own criteria for issuing credit, and the timing of when the score was produced. A hypothetical scenario for calculating a credit score might weigh the following factors this way:

Lenders will also look at other factors, such as your income, your assets, or how long you have been at your current job. Note that a high credit score isn’t the only sign of financial health. An individual who chooses to use cash or debit cards for major purchases rather than taking out loans will likely have a lower credit score than someone with a long record of multiple well-managed debts, even though they may be very financially responsible. 

Why Does Your Credit Score Matter? 

Resolve to Improve Your Credit Score Using These 10 Tips

Build a Credit Score Without Debt

Young adults and those who have never had a need for credit may not want to go into debt but want to build their credit score. Here are a couple of ways that you can build your credit score without debt.

With a Better Credit Score, Be Proactive to Save Money

Once you’ve put in the work to get your credit score above 700, you can turn your attention to becoming more financially fit. Investigate whether refinancing your mortgage at a lower rate could save you money, while being mindful of closing costs or other fees. At renewal time, ask your auto and home insurance provider to re-run your rates, and consider shopping around with other insurers. Lenders, landlords, and insurers want to do business with people with excellent credit, so they will be competing for your business and offering you better deals. 

[If your nxg|PROTECT Program includes Credit Score Tracker, include the following statement] Remember, with your <EMBEDDED_ACCOUNT> account, you are entitled to receive convenient access to your TransUnion® credit score monthly. Your score is tracked on a timeline to help identify unexpected changes in your score’s movement that could indicate identity theft.

[If your nxg|PROTECT Program includes Credit Report, include the following statement] Plus, with an <EMBEDDED_ACCOUNT> account, you have access to your <annual/monthly/weekly> credit report through <Experian/Equifax/TransUnion>.

[If your nxg|PROTECT Program includes Credit Score Simulator, include the following statement] Plus, all <EMBEDDED_ACCOUNT> accounts include an entitlement to Credit Score Simulator. You can use the Credit Score Simulator to see how different actions, such as increasing card limits, or paying off a loan, will impact your VantageScore. 

Get a head start on the best New Year’s resolution — starting 2024 with a plan to increase your credit score and take advantage of the additional financial freedom that it can offer. That sounds like something to celebrate!

Social Media Content

Use the social media posts below to educate your account holders about credit scores and what they can do to improve theirs. The information provided may allow your valued clients to put more of their money toward their savings goals by helping them focus on increasing their credit score and their bottom line. 

Post #1: Do you understand what a credit score is, how it is calculated, and what you can do to improve yours? Here's what you need to know and 10 ways you can increase your score by the end of next year. #YourProtectionPartner

Post #2: Learn 10 ways to get more financially fit in 2024! #YourProtectionPartner 

Post #3: While you cannot calculate your exact credit score on your own, it’s easy to learn what your score is, what might be damaging it, and how you can build a strong score for financial freedom. #YourProtectionPartner