We’ve compiled the best credit tips to help you out concerning your credit and agricultural land loans.

National Get Smart About Credit Day is October 19^th, and it’s the perfect time to increase your knowledge about what your credit is all about. For those looking for farm loan credit, it’s a topic of great significance. We’ve compiled the best credit tips to help you out concerning your credit and agricultural land loans.

Credit Day History

National Get Smart About Credit Day is part of The Get Smart About Credit program, which is sponsored by the American Bankers Association (ABA) Community Engagement Foundation. It’s a program aimed at raising awareness about the importance of using credit wisely. Celebrated the third Thursday in October, this year will be the 15^th year of the program.

Credit Primer

Your credit is a reference to your history of paying money that you owe. Whether it’s paying your bills or repaying a loan, how well you repay the money you owe is called your credit history. That history is boiled down into a credit score, which is calculated by a formula that takes into account factors like how long you’ve had a loan or credit account open, how much you owe versus how much money was lent to you, if you pay on time or not, and more. The most common formula used is generated by Fair Isaac Corporation, or FICO, and is used by the three major credit bureaus—Experian, TransUnion, and Equifax—to report your score to creditors and lenders. However, there are many formulas and companies out there, and they are generally used by different types of lenders.

When you apply for a loan, whether a home loan, auto loan, or agricultural land loan, lenders contact the credit bureaus to get your credit score and credit history. Lenders will use that information to help determine whether or not they will approve you for a loan, how much they will lend you, the interest charged on the loan, and more. Those with a good history of payments on other loans—and thus good credit—will likely have higher approval rates and lower interest rates.

Credit Tips

The following are credit tips for making your credit as good as it can be. Know that there are no fast and easy ways to “fix” your credit; it takes time and good money management.

• Pay your bills on time and in full. This is the leading advice in all credit tips. Some creditors and lenders may let you pay a day late here or there without reporting it to a credit bureau, but if you make it a habit, it will bring your score down.
• Check your credit report for errors. You can get your credit report for free once a year at AnnualCreditReport.com. Review your full report and contest issues that are incorrect. This can also help you to catch fraud and identity theft. If you want to know your credit scores, you will have to pay a fee to each of the national credit reporting companies.
• Try to keep your used credit ratio low. Lenders like to see borrowers using only a small amount of their credit. If you have a credit card with a $20,000 limit, and you’ve used $19,500 and only make the minimum payment, it looks as if you’re struggling to repay the debt. Try to use no more than 30% of your credit.
• Talk with your lenders about your situation. Whether you’re facing a financial issue that may impact your ability to make payments, or you’re just applying for a loan, you’re not just your credit score and credit history. Learn more about what AgAmerica Lending is looking for in potential borrowers with our take on The 5 Cs of Credit.

At AgAmerica Lending, we know there is a story behind every farm and its finances. Contact us today, share your story, and learn how we can help your agribusiness grow and succeed.