SALT LAKE CITY (7/23/14)--To help viewers understand how credit bureaus calculate credit scores, Sterling Nielsen, president/CEO of Mountain America CU, West Jordan, Utah, with $3.9 billion in assets, offered up some insight during a recent appearance on
's "Studio 5 with Brooke Walker" in Salt Lake City.
"There are three main (credit reporting agencies), and they all look at things just a little bit differently," said Nielsen.
"First of all you need to make sure that you watch that credit history," he advised. "Make sure that you make your payments on time; they're going to look at how often you make a late payment, how late that payment is (and) how many accounts are late. These all play a big part in your credit score."
Next, Nielsen said, consumers should pay attention to their levels of credit utilization and make sure they're not using too much of their limits.
"A lot of people think, 'Hey, I have a $5,000 credit card (limit), I might as well charge it all up,'" Nielsen said. "But that hurts your overall credit score. You're better off keeping your utilization down to about 30%," even if you pay off your balance every month.
Finally, consumers should work to build a strong credit history, Nielsen said.
"You want to show a period of time when, not only were you paying your bills on time, but you were managing credit responsibly," Nielsen said. "The length of time is quite important in managing your credit score."
Nielsen added that consumers with credit scores of 700 or above likely will receive the most advantageous interest rates, while those with credit scores below 600 will not fare as well.