Friday, May 14th, 2010 at
9:40 am
Anytime we are in a bank or see something even remotely finance related we hear the common phrase of credit score. Anytime we see a credit card application or open a bank account, somewhere on this bit of paper will be those two little words.
Most of us can likely make a fairly educated guess as to what the credit score is but we never ask the question: what’s my credit score?. However, many of us are unaware of the profound impact this little number can have over our financial lives. Most of us are unaware of the credit score range and where we lie in relation to what our credit score numbers are or even how to improve your credit score.
The credit score affects much more than if you are going to get that new credit card or not. Better credit scores can be the deciding factor in many of our life’s decisions and challenges. In this article we will look at why it is so important to maintain a good credit score in this day and age.
The credit score is most commonly associated with loan decisions. It probably comes as no great surprise that whenever, you apply for credit card, loans, installment payment plans and mortgages the credit score is one of the major deciding factors.
People with a poor credit score will likely struggle to get approval on any form of credit more so than those with high credit scores. Low credit score are very difficult to obtain if you have a poor credit score. By keeping on top of your finances, and keeping up-to-date with your credit score information you can insure that you know how to improve your credit score.
A perfect credit score not only decides yes or no on various types of financing, but what rate of interest you will receive. Those with a good credit score are more likely to get the premium rates of interest. Those with poor credit scores are going to be charged more. Those with low credit scores can still obtain financing but quite often they are forced to use sub-prime lenders. These lend the money but at much higher costs.
Many are surprised to hear that your credit score can now affect the rate you receive on car and homeowners insurance. Several states have started employing this policy on the evidence that statistically, those with a good credit score are less of a burden. They make fewer claims than those with a poor credit score.
Finally, sometimes potential employers will look at credit scores when making the decision on whether or not to hire. Those positions in the financial world are known for this. A poor credit history will make some employers reluctant to offer expense accounts and company credit cards.
Many of us need to know how to improve your credit score and accounts to get the things that we need today. Most of us would struggle to buy a new car without financing or a house without a mortgage.
Having credit is important and so is improving your credit score. Keeping the credit score high can offer better finance opportunities as well as more favorable insurance rates and even that dream job.
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