5 Hot Takes on Credit
IYKYK but you might want a refresher on how to score with your credit.
We’re not here to debate pineapple on pizza or socks with sandals, but we do have ideas about credit.
Hot Take #1: Check your credit score often.
The difference between a hard pull and a soft pull matters.
A hard pull happens when you authorize a lender to check your credit (i.e., you apply for a new credit card or loan). This drops your score by a few points.
A soft pull happens when you check on your own. This does not affect your credit score. Take a look, and then take a look again next month to see if it’s changed.
UW Credit Union members can access their credit score and full credit report for free anytime in Web Branch.
Hot Take #2: Use your credit card sometimes instead of your debit card.
Debit cards are not a form of credit — even if you select “credit” when making a transaction – so your purchase activity does not get reported to credit bureaus and will not affect your credit score.
So use your credit card for some expenses. Just make sure you understand best practices for using a credit card. Only spend money on purchases you physically have money to spend on, watch your credit utilization ratio and pay off your balance in full every month.
Need to get cash? Your debit card is your go-to.
Hot Take #3: There are cards with good perks AND no annual fee.
Your options may be limited if it’s your first credit card, but you can still find something with useful benefits and a $0 annual fee. Research the best fit for you before you apply.
All of UW Credit Union’s credit cards come with no annual fee and a monthly Cash Back Bonus.
Hot Take #4: Don’t close a card, even if you don’t use it.
We get it – you got a huge discount on your back-to-school haul when you opened a credit card at your favorite store. But now it’s just taking up space in your wallet so you figure you should just close the account.
While it’s fine to cut up the card and toss it to resist the temptation of overspending, closing the account could negatively impact your credit score.
If that card has an annual fee or a high interest rate, ask if the card issuer can switch you to a card with no annual fee and a lower interest rate. Not possible? It might make sense to close the account but this should be a last resort.
Hot Take #5: Don’t let your roomie haunt your credit score.
Just because someone is super fun to hang out with and likes the same streaming services as you, doesn’t mean they make a good roommate. They should also be dependable and trustworthy.
When you sign a lease with others, you are all responsible for the total rent. Which means if just one of you flakes on paying rent, everyone who signed the lease could see their credit take a hit.
There are a lot of myths around what affects credit. You might be surprised at all the sneaky little things that could impact your credit score. Don’t be scared to use credit, but use it mindfully.
Questions? Use the free credit score resources available to you through UW Credit Union, such as our free Credit Consultations and Credit Score Services.
