Your credit score, if you didn’t know by now, is important for your future. Basically, it’s a mathematical calculation done by credit bureaus in order to determine your credit score or credit worthiness.
Put in simple terms:
– A high credit score means you are a good credit risk.
– A low credit score means that you’re going to have a hard time getting a loan. You will get offers, but with a very high interest rate.
Therefore, it’s important. The better your score, the lower the interest rates will be and the cheaper it will be to borrow. Did you know that even a one percent reduction in the interest rate can potentially save you THOUSANDS of dollars? That’s true, so here are some steps which you can follow in order to save your money:
– Pay your bills on time. By paying your bills late, it will significantly damage your credit score and reduce it by up to 30 points, which can make the difference between getting a loan with a low interest rate and getting one that will become impossible to pay.
– Apply for a secured credit card if you’re starting out with no credit. It will help you build towards an amazing credit score.
– Always check your credit report. You can ask for a copy of your credit report once a year from the three major bureaus. Always ask for it, because around 89% of the report last year were proved to be erroneous. Humans are filling that information and if one is tired, it may cost you.
If you’re interested in what a good credit score is and how it classifies, you can go ahead and check out our other articles here on Good Credit, because we’re here to help you through your credit journey!