From home loans to car purchases and everything in between, your credit score has become one of the most powerful (and often misunderstood) external forces that drive your financial life. Our presenter today, Jeremy Shaffer of Lake Michigan Credit Union, shared how credit and credit scores came to dominate our purchasing economy. Then he shared ways that we can take control, and even leverage credit to our own benefit.
For context, traditionally lenders evaluated borrowers using the “5 Cs of Credit”. These included:
- Character – Trustworthiness and likelihood to repay
- Capacity – Ability to borrow or manage debt
- Capital – Cash or liquid assets available
- Collateral – What can back the loan
- Conditions – Economic environment for repayment
But today, as Jeremy explained, the system has changed. In the name of standardization and fairness — especially with large, non-localized lenders dominating much of the market — “character” has largely been replaced by a quantified distillation of creditworthiness known as your credit score.
📊 So what makes up* a credit score?
- Payment History – 35%
- Credit Utilization – 30%
- Length of Credit History – 20%
- Credit Mix – 15%
- New Credit/Checks – (Negative impact)
*approximations only—primarily given for ranking and comparison purposes—may vary slightly by bureau
Further, small changes can have a big impact. With focused actions — like waiting to apply for other loans or paying down a specific account — borrowers can sometimes jump their score 40–100 points up the 550-850 point track, potentially improving interest rates by as much or more than a quarter point!
Jeremy’s work goes far beyond rates and applications too. He knows it affects the lives of people he who interacts with and cares about, and he takes that responsibility very seriously. Some cases weigh heavily on him to the point of lost sleep, but the chance to make a real positive impact on a family, neighborhood, or even one person’s life-trajectory does make it all worth it in the end.
💬 If you’re thinking about a purchase or want to improve your credit position, reach out to Jeremy and his team at Lake Michigan Credit Union to receive an amazing level of guidance, competence, integrity, and true care that is becoming increasingly rare in the financial sector.
And if you’d like to meet more professionals who care deeply about the people they serve, visit Border to Border Business Connections next week! Here, relationships lead to results.
