Your credit score is important in your life, even if you may not realize it.
Even if you don't think that you will be applying for a loan anytime soon, your credit score can impact you in many other ways. Plus, you can never predict the future, so you may as well work on improving your credit score anyways.
This is especially true since improving your credit score can actually be quite easy, either manually or by looking to a credit repair company.
Here is how your credit score can impact you:
- It can influence whether or not you are approved for a home loan.
- It can influence how large of a home loan you are given.
- It can influence the size of the down payment you are required to put down.
- It can influence your interest rate.
While you shouldn’t go obsess over improving your credit score (is obsessing over something ever good?), it is important to learn more about them due to the impact they may have.
Due to this, I believe a credit score can be used to a person’s advantage.
A good credit score is typically over 700. The higher the number of your credit score, the better.
Your credit score may be checked in a several different situations such as:
- When you check out home, car, or other forms of insurance – If you have car or home insurance, your rate may be calculated on one factor that you did not know about and that is your credit score! If your credit score isn’t good, then you may actually be paying more because some companies may consider you to be more risky than the average person who is insured.
- When looking for a job – This might be shocking to hear, but there are some employers out there who will check your credit report (with your permission). Industries that often check your credit report include those that deal with financial services, chemical, and defense.
- When attempting to rent a home – If you have decided that you don’t want to own a home, do not think that you have escaped having your credit history checked. Your landlord will most likely check your credit history. They will want to know if you pay your bills on time or if you have skipped bills entirely. This will say a lot about you as a renter, whether you want to believe it or not. If your credit history is not something they want to see, you may be denied the rental altogether, you may be asked to pay multiple months at once, or you may be asked to find a co-signer just in case you fail to pay your rent.
- When applying for credit cards – If you don’t care about credit, then you probably will not care about this one. However, if you want a credit card, especially one with a good rewards system in place (such as if you want to earn a free cruise or free $400 in travel), then you will want a higher credit score. The good reward credit card offers and acceptances are usually only available to though with good or excellent credit scores.
- When applying for a loan – This is probably one of the most common reasons that people think that they need a good credit score for. However, I saved it for last so that you would realize that there are many other reasons for why you may need your credit score. If you apply for a loan, your credit score and credit history will definitely be checked. Before you are approved for a loan of any sort, the lending institution is going to thoroughly check your financial history so that they don’t end up losing money on your loan.
Thanks for reading! What's your credit score? Do you want it to be higher?
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