How Credit Score Affects Your Life
Good Credit Score vs Bad Credit Score
Building a good credit score, also known as a credit rating, is crucial because it can affect your ability to borrow money or access products such as credit cards or loans. You can survive with bad credit, but it’s not always easy and definitely not cheap. Establishing a good credit score comes with a lot of benefits like having more negotiating power, easier approval for rental houses and apartments, and much more.
Benefits of Having a Good Credit Score
Low Interest Rates
Lower interest rates make it cheaper to borrow. This tends to encourage spending and investment, and also leads to higher aggregate demand and economic growth. If you have a good credit score, you’ll almost always qualify for the best interest rates. This is one of the biggest advantages of having a good credit score.
More Negotiating Power
A good credit score gives you leverage to negotiate a lower interest rate on a credit card or a new loan. Your best alternative to a negotiated agreement is often your best source of bargaining power. By cultivating a strong outside alternative, you gain the power you need to walk away from an unappealing deal.
Better Car Insurance Rates
Looking for the best rates on car insurance? Insurance companies use information from your credit report and insurance history to develop your insurance risk score. With a good credit score, you’ll typically pay less for insurance than similar applicants with lower credit scores.
Get Approved for Higher Limits
Your borrowing capacity is based on your income and your credit score. Getting a higher credit limit on your credit card can be helpful or harmful, depending on how financially stable you are. Having a good credit score can help you get approved for higher limits which gives you more flexibility and help your credit scores by lowering your credit utilization ratio.
Easier Approval for Rental Houses and Apartments
Your rental application is one of the things the real estate agent, property manager and landlord will look at to determine if you’re the right tenant for the property. A bad credit score can severely damage your chances of getting into an apartment, so make sure to have a good credit score that increases your chance of getting approved
The Side Effects of Bad Credit
High interest rates
A lower score decreases a lender’s confidence that you will make payments on time and may harm you qualify for lower mortgage interest rates and fees. Creditors and lenders make you pay for this risk by charging you a higher interest rate.
Credit and loan applications may not be approved
A low credit score might get you in trouble when it comes to the loan application. Creditors are willing to accept a certain amount of risk. However, if your credit score is too low, they might not want to lend to you at all.
Difficulty getting approved for an apartment
Having bad credit can make it much more difficult to rent an apartment or house. Make sure to have good credit score before filling application for an apartment or house.
Getting denied for employment
This is one of the most important reasons why not to have bad credit. Certain jobs, especially those in upper management or the finance industry, require you to have a good credit history. You can miss an amazing opportunity just because of your bad credit.
Higher insurance premiums
In order to keep your car, home, apartment, or health insured, you need to pay your monthly premium. During the underwriting process, the insurance company will evaluate your current risk and set a premium amount They use credit-based insurance scores to help determine the rate you'll pay. Having a bad credit score can significantly increase your insurance premium.
Repair Your Credit in 3 Steps
Get the Latest Copies of Your Credit Reports
Before you can start repairing your credit, you have to find out what is "broken". Read through your credit report to see what are the negative items affecting your credit score. This is the first and most important step towards fixing your credit score.
Tackle Past Due Accounts
Taking care of your payment history is crucial to credit repair since your payment history impacts your credit score more than any other factor. Your goal is to have all your past due accounts reported as “current” or at least “paid.”
Get New Credit
Step 3 is as important as the previous Two. After you’ve resolved the negative items on your credit report, work on getting positive information added. Get a new credit and start ower. Slowly build your credit and make sure to maintain it.
Repair Your Credit with Our Help
Our unique collection of services have been carefully selected to provide protection and opportunity over the many aspects of your finances- all combined into one easy-to-use system. Become our client and achieve your credit goals
Thinking About New Career?
Where do you want to be in 5 years? 10 years? What about right now? What if you could have the benefits of a traditional business career, but without someone else controlling your income, hours, partners, and overall job security? Take control of the possibilities. Enjoy what you do.