The Importance Of Your Credit Score
Post date: 10/1/2021
Availability and special terms are subject to change.
Your score impacts a great deal, more than just loan rates.
We encourage you to understand and learn how to bolster your credit score for many reasons, primarily for the rates you pay on your loans and credit cards. But your rate impacts so much more than rates. We’ve compiled a list of ten items to consider when it comes to a strong credit score.
Top Ten Areas Impacted:
- Lower Loan Rates – Lenders, including banks, credit unions, and credit card companies, will review your credit history and score to determine how likely you will repay the loan. This is probably the most widely recognized point about your credit score. The higher your score, the lower your loan rates and the lower your monthly payments. Lenders will also evaluate additional factors, including your income, debt, and repayment history. Scores may be the VantageScore, FICO score, or even their own calculated score.
- Preferred Credit Card Rates – The same process holds true for your credit card approval. Most lenders will approve you for a credit card and base your rate on your credit score.
- Refinancing Opportunities – The stronger your credit score, the greater opportunity you have to refinance other high-rate loans for added savings. And as you improve your score, you have the chance to save money and improve your financial situation.
- Job Interviews – Employers may view your credit history to see if you are financially responsible and if there are obligations that could impact your judgment. Your credit can also affect promotion opportunities or positions that require a security clearance. It is also important to note that your credit history affects your job potential, not your specific credit score.StudentLoanHero.com notes that employers may review your credit report, but the version they receive doesn’t come with a credit score. It also omits other pieces of information, such as your date of birth and account numbers, because employers don’t need this data to make a hiring decision. A company can’t pull your credit as part of an employment check unless you give written consent, and some states outlaw the practice altogether.
- Car Purchase – A stronger credit score will impact the rates you pay on a car loan. And if you qualify for a lower rate and payment, you can buy more car for your money or reduce your monthly expense.
- New Home Purchase – Your credit score will impact your ability to get preapproved and qualify for a mortgage. It also affects your rate, which will directly influence the amount of your monthly payment. Note that mortgage providers tend to use the FICO rating rather than the newer VantageScore.
- Apartment Rental – Prospective landlords will review your credit history to see how likely you will pay your rent on time. Poor credit can also be a deterrent, and it is important to note that your credit history affects your job potential — not your specific credit score.
- Cell Phone Contract – It is also important to note that your credit history can impact what you pay for certain items and the contracts you qualify for, including your cell phone.
- Cost of Utilities – Utility companies, including gas, water, and power providers, may check your credit before opening a new account for you, adds com. If you have poor credit, you may have to pay a security deposit to open an account and get your utilities switched on. Having good or excellent credit can make the entire process easier and cheaper.
- Cost of Insurance – Insurance rates, particularly your auto insurance, may be impacted by your credit. com says that in many states, insurance companies may use a credit-based insurance score to help determine your premiums. While these scores differ from consumer credit scores, they’re based on your credit history, and having a long history of paying your bills on time could help you qualify for lower premiums.
The stronger your credit score, the better position you are in financially. We can offer tips to improve your score. Also, contact us for a free credit review to learn more.