Who knew that one number could have such a significant impact on your life? Essentially, your credit score is a number that other people use to judge how responsible and trustworthy you are with money. People with higher credit scores are more likely to get better rates on insurance premiums, auto loans, mortgage loans, and more.
It is important to monitor your credit score and take actions to ensure that it stays high. Here are some of the reasons it will benefit you to have a good credit score:
When you are approaching lenders to take out a mortgage on a home, they will look at your credit score to determine your interest rate. The higher your credit score is the lower your interest rates will be. A score below 620 will make it more difficult to acquire a mortgage and a credit score above 740 will get you the best rates. The lower the interest rate, the lower the monthly payments and the more house you can afford for the same payment.
Planning to rent instead of buying a home? According to the Federal Trade Commission, if you have a low credit score utility companies may charge you a deposit or require a letter of guaranty to grant you service. A guaranty is a letter from someone agreeing to pay your utility bills if you do not.
Buying a Car
Having a good credit score may even help you afford a nicer car for the same monthly payment as a less expensive car. When you have a high credit score, you can receive lower interest rates on an auto loan and therefore lower payments.
President and Chief Executive Officer
Photo Credit: wirojsid