Your credit score is a way of determining your credit history. Today credit is more than just for taking loans and insurances. It has become an integral part of your financial life. It will determine the type of opportunities you are going to get in different phases of your business or work life.
What is a Credit Score?
It is actually a ranking number between 300 and 850 that tells the approximate worth of your credit card. A credit score is based on credit history such as your total accounts, debt etc. It is the FICO numbering system used by most of the lenders. FICO score and VantageScore are almost same.
Benefits of Your Good Credit Score
Credit score of 760 or so is considered very good. It can give you many benefits:
- It is a fact that people with high credit scores experience low interest rates on home and car loans.
- Lenders and insurers give them better offers due to high competition.
- With all the money you save, you can increase your funds and work on your financial goals.
- You’ll have a leverage to get low interest rates on new loans and credit cards and loan approvals will be much easier.
- You can borrow a higher amount from banks based on your credit score and income.
- You’ll not have to pay any utility security charges or even cell phone security, just a contract.
Importance of Building Credit Scores
Although there are no credit check loans options available but it doesn’t mean you shouldn’t try maintaining a good score. These are some points to tell you the importance of credit score and your credit report and why they matter:
Good Credit Score for Outstanding Loans
If you apply for home loans or auto loans, you need to have good credit scores to get approves. Leverage your good credit score to get good deals. Your credit score will determine the amount you will get and the interest rate you’ll have to pay. Low credit scores will lead you to pay higher interests and will increase your monthly payments.
Good Credit to Live peacefully
Your credit score is taken as an indicator to check your responsibility towards your finances and payment of your bills. Many mortgage lenders, utility providers, and renters check your credit before any deal. They don’t usually approve loans for people with low or no credit scores as there is no guarantee of them making regular payments.
Approvals for Business Loans
Many people want to start their own businesses. As a startup, you’ll need a good amount of cash for your business. People who do not have that go for business loans. Only those who have a good FICO score or credit score qualify for taking business loans.
Job Opportunities and Credit Checks
You’ll have almost double opportunities with a good FICO score than someone with a low credit score. Employers check your credit report and score as it is a means to determine your credit history.
Tips to Grow Credit Scores
These are some everyday habits you should adopt in order to substantially grow your credit score:
- Pay your bills on time.
- Charge less than 30% of your credit limit.
- Regularly and mindfully your credit card.
- Do not carry debt.
I think these points will be enough to make you understand the importance of a good credit score. With a 760+ credit score, you’ll be able to use and brag your rights in almost every deal.
Ayesha completed her Doctor of Philosophy in Biochemistry and started her career as a College Lecturer in 2013. Today, she’s a happy mom of 2 Kids in the field of digital marketing. She loves reading books, spending time with her family, and making delicious food for her husband.