“A bank is a place that will lend you money if you can prove you don’t need it.” – Bob Hope
Are you ready to purchase a new home, or maybe upgrade to a new car that you’ve been eyeing? If so, how will you pay for it?
If you are planning to purchase a big-ticket item, your credit score will play a major role in the process.
Credit scores are utilized by lenders like banks, car dealerships, and credit card agencies to determine the interest rates and loan amounts.
Benefits of Good Credit
- Lower interest rates ( pay less/save more )
- Higher loan approval amounts ( mortgages or auto loans)
- Pay less security deposit amounts (cell phone, utilities, apartment rental)
Credit Score Numbers
550 & Lower – Bad
550 – 649 – Poor
650 – 699 – Fair
700 – 749 – Good
750 & Above – Excellent
Credit Help
Know Your Credit – The first step to establishing or repairing credit is to know your credit score. Websites like Credit Karma and Credit Sesame allow you to check your credit without affecting your score.
Credit History Counts– The length of time on a ‘line of credit’ matters. Most credit agencies suggest that a line of credit should remain open for a minimum of two years.
Warning – Many people believe that they should apply for various credit cards to boost their credit scores. The more credit you apply for means that more inquiries will show on your credit report. Credit inquiries can be considered “Hard Inquiries” or “Soft Inquiries”. Each credit inquiry negatively impacts your credit score. Credit inquiries can stay on your credit score report for up to two years. Having too many credit cards can create an easy way to overspend and land in a sea of debt.
Payment History/Credit Card Delinquency -Credit card delinquency takes place once a payment becomes 30 days overdue. Delinquencies stay on your credit score report for up to seven years. Delinquent payments make it difficult to receive A+ financing on big-ticket items.
Good Credit Saves
Having good credit can save you thousands of dollars. The difference between “poor” and “excellent” credit can change the direction of your life. Know your credit score. If your credit score is not satisfactory, set goals to improve your score.
