What is Credit and Why Does it Matter?
by Grand Savings Bank
March 2, 2026
March is National Credit Education Month! To celebrate, we’ve compiled industry experts’ insight for boosting and maintaining your credit. Read on to learn more!
What is Credit?
“Credit” refers to a person’s debt repayment history, which is the overarching factor in determining one’s ability to borrow money. The better your credit, the better your chances of being approved. If you have a staggered history of debt repayment, or if that history isn’t particularly extensive, you may have poor or fair credit – but don’t panic. There are many ways to build upon or improve your credit. It could mean taking on higher interest rates in the interim, or lower loan amounts; however, it will pay off in the long run!
Understanding Credit Scores
Your credit score is a three-digit number that represents the state of your credit. The higher your score, the better chance you have at loan approval and low interest rates. The score is determined by your credit itself: the greater period of time that your debt repayment history covers, and/or the better your history of making timely payments, the higher your credit score will be. If your credit shows a history of untimely payments or multiple large balances, your credit score may be lower. The more disciplined you are about making payments on your balances, the better your credit score will be.
Strategizing Debt
It may sound counterintuitive, but taking on debt is actually a critical component to establishing, maintaining, and improving your credit score. The key is to be strategic about how and when you incur debt! For example, you should never blindly accept the first introductory credit card rate you see – research multiple creditors’ introductory offers to ensure you’re getting the best repayment plan and interest rate possible. Before determining whether you’re approved for a loan, creditors will look at your credit report (this is referred to as an inquiry). Too many inquiries on your credit report in a short period of time can actually cause your credit score to decrease. Keep that in mind when determining the timing of your application for credit!
Now that you have an understanding of credit, credit scores, and debt management, it’s time to monitor your credit! Grand Savings Bank has all the resources you need. Connect with us today to learn about our credit monitoring, subscription management, and identity theft protection services!
