Understanding Credit

The key to financial health is understanding credit. It affects not only your ability to qualify for a loan, but also the rate you're eligible to receive.

Credit Overview

When applying for a loan, lenders want to understand the risk they are taking by providing you with their money. They take into account factors such as your income, current level of debt and your employment history. One number they often look at is your credit (or FICO) score. Learn more about this by viewing Understanding Your FICO Score.

Managing Debt

Managing your debt wisely is one way to ensure good credit standing. Vermont Federal offers access to a tool called SavvyMoney which, after answering a few short questions about your current income and debt situation, provides you with strategies for managing your debt. No personal identifying information is linked to your financial information and the service is completely anonymous.

Free Credit Reports

Consumers are eligible to receive one credit report each year, free of charge.

Request your free credit report in one of these two ways:

This is the only authorized source for consumers to access their annual credit report online for free. Be sure to order from the agency listed above. If you go directly to the credit reporting agencies, you may be charged.

Fixing Errors on Your Credit Report

If there are errors on your credit report, you may take the following action:

  1. Write to the consumer reporting company and explain what information is inaccurate
  2. Credit bureaus will review the documentation and, if further investigation is required, they will provide a copy to the source that furnished the disputed information to them
  3. The source will then review the information and report back to the credit reporting company

Improving Your Credit Score

If you find that your credit score is lower than you would like or is preventing you from qualifying for loans and good rates, the following steps may help to improve your score:

  • Make your payments on time
  • Establish a long-term account with a reputable credit card company
  • Don't take on more debt than you can handle
  • Don't get caught up in credit repair scams
  • Speak to a loan officer about our Credit Builder Loan
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