When you are young and you get your very first credit card or your first loan, you may not be entirely thinking about your credit score. But, you should be thinking about it!
No, I’m not saying that you should think about your credit score every second of your life. However, it should be on your mind when you make a financial decision. When you open a credit card, use a card, apply for a loan, rent a home or something else, your credit score is most likely being affected.
You might be thinking “But, I don’t need to use my credit score anytime soon, so, who cares?”
If you can help it, then you should always be working on increasing your credit score, not decreasing it. You never know when something may come up and you will need your credit score to qualify for a loan.
If you feel overwhelmed by having to fix your credit on your own, please contact The Credit People to assist you.
Here are reasons why your credit score is important.
A higher credit score most likely means a lower interest rate.
I have seen people who have car loan interest rates of 24%. Yes, I said 24%!!!
If some of these people just shopped around and had a better credit score, they probably could get interest rates of 2% or 3%. That is a HUGE different in monthly payment.
Also, when applying for a home loan, the difference between a good credit score and an average credit score may be the difference of something just like 1% or 1.5%, but that may mean a difference of hundreds of dollars each month with a monthly mortgage payment.
That job you want may run a credit check.
A bad or average credit score may not prevent you from getting a job completely, but it may be a big difference if a hiring manager is stuck between choosing two very similar candidates.
A lower credit score may mean that you will be denied altogether.
If you seem to be a complete risk to a lender, then they might not want to handle your loan as well because they could possibly not make any money from your loan.
Your car insurance rates may be higher if you had a “bad” credit score.
This is something that many people do not realize. Your credit score does affect your car insurance rates. I believe there are three states in which this practice is banned, so that means that nearly all of the states in the United States employ this practice.
Do you think your credit score is important? Why or why not?
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