24 Jul Personal Finance 101: Why Your Credit Score Matters
You hear a lot about credit scores; ads are plastered across televisions and billboards talking about ways to find out and improve your credit score. What people aren’t talking about are the basics: what it is and why it matters to you. You can’t start off your financial journey without learning and understanding what your credit score is; that’s where we come in.
To first understand why your credit score is important, you need to know what exactly it is. Essentially, your credit score is a three-digit number that takes the information from your credit report and compresses it into a single number which indicates how likely you are to pay back your debts on time. People can look at your score and determine quite a few things, so it’s important to keep an eye on it. It’s not some intangible number just floating around, anything from your car to your home can be affected by your credit score – that little three-digit number can have big impacts.
You might not think your credit score matters much, but it can determine a lot of things in your life for you. If you want to buy that new car or move houses, your bad credit score could prevent you from getting a mortgage or a car loan. Plus, a good credit score could mean better interest rates for your loans. The higher your score, the lower your payments are – a 100 point difference could mean the difference of tens of thousands of dollars that you’re paying. Even if you’re not too concerned with loans, your credit score could affect whether or not you’re approved for that new apartment you’re looking at, your cell phone plan, and your home and auto insurance.
If you have any questions about your credit score, how to monitor it, and how to improve it, you can get in contact with us here.
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