Why is it important to have good credit?
A good credit rating is important. Many businesses check your credit, from mortgage lenders to insurance companies to owners. If your score is low, you may not be able to borrow money or live where you want. Or you can pay more for the loans.
The good news is you can take action monitor your credit score for free and to increase it if necessary. Your credit score may change quickly whether you adopt responsible borrowing behavior and remove inaccurate information. It is worth taking these steps because of the importance of good credit.
Knowing where your credit score is so you know what steps to take to improve it. You can visit Credible to check your credit score for free without having a negative impact on it.
Why is a good credit score important?
A good credit score is important for five main reasons
- Having good credit gives you a choice of borrowing options
- A good credit rating makes borrowing less expensive
- Homeowners Check Your Credit Score
- Your credit score affects insurance rates
- Employers Check Your Credit Score
You may have fewer borrowing options with poor credit. For example, refinancing private student loans might not be possible since refinancing lenders need good credit. Bad credit can also prevent you from getting the best reward cards or a good rate on a personal loan.
A low credit score will not only leave you with fewer borrowing options. Although bad credit loans are sometimes available, lenders will generally charge a higher interest rate. For these reasons, one of your primary financial goals should be to improve your credit scores.
Finally, insurance companies, employers, and homeowners also check your credit. You may be denied the opportunity to live in the apartment of your choice. Or an employer may not offer you a job if you have a problematic credit history. Your insurance rates will generally also be higher.
What is a good credit score?
There are actually different types of credit scores, but FICO scores are the most common scores used by many lenders. FICO scores range from 300 to 850, with higher scores representing better credit and lower scores indicating bad credit.
A score of 300 to 579 would be considered very low; while the scores between 580 and 669 are correct. Good scores are between 670 and 739, while very good scores range from 740 to 799. Finally, scores above 800 are considered excellent credits.
You can visit Credible to check your credit score for free to see if you have bad credit, excellent credit, or somewhere in between.
Is it important to constantly monitor my credit score?
Keeping an eye on your credit is important.
By monitoring your credit, you can see how your financial decisions, such as paying off your personal loan, improving your payment history, or reducing your use of credit, are affecting your credit. You can also make sure that no one has applied for unauthorized credit on your behalf and confirm that there are no errors on your credit report.
It’s a good idea to check your score at least once every few months, if not more often. You can visit Credible to learn more about credit monitoring and find out the best way to keep track of your credit history.
How Can I Increase My Credit Score Quickly?
If your credit score is not as high as you would like, you have options to improve your credit. In fact, taking some smart financial steps could help you improve your credit scores fast. The most important moves to affect your credit include:
- Debt refund: The rate of credit usage is one of the major determinants of your score and a major factor to focus on when it comes to credit repair. It is determined based on the amount of available credit used. If you pay off some of your debt, you’ll lower your ratio because you’ll use up less of your available credit – and your score should go up.
- Become an authorized user: When someone adds you as an authorized user to a credit card with a long positive payment history, the credit card history shows up on your credit report and improves your own credit history.
- Using Experian Boost: Credible’s marketing partner, Experian, offers a tool called Experian Boost that allows you to connect your bank accounts to your credit report. This allows you to take into account data on utility payments and payments to streaming services to determine your credit score. This can increase your score if you don’t have a long history of positive credit payments.
Since good credit is very important for many reasons, it is worth considering financial goals that improve your credit score and, if necessary, include credit repair. You can visit Credible today to sign up for credit monitoring or to see how your score impacts your insurance rates or affects your ability to be eligible for loans like student loans or personal loans.
Have a financial question, but don’t know who to ask? Email the Credible Money Expert at [email protected] and your question could be answered by Credible in our Money Expert column.