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Published On: Sat, Aug 22nd, 2020

Why does your credit score matter?

It’s something that we were never taught in school, but it is probably one of the most important things that we need to know. Our credit score. 

When we turn 18 we suddenly get a lot of responsibility in our lives. We are able to vote, to get a credit card,, etc. If we do not take care of our credit score life can be a little bit harder for us to advance in life. Below are some reasons why we need to take care of credit score and what can happen to a negative credit score and what you can do to make it better. 

Good credit is everything 

Having a healthy credit score and credit history is everything. It determines how you live your life sort of. When having a healthy credit score you can qualify for more things such as lower interest rates, better payment deals, credit cards, loans, and the list honestly goes on. Being able to qualify for those types of things are essential because you have more financial freedom as well as financial protection. Let’s say for instance you lose your job or get sick. You have some financial protection by being able to use a credit card. Yes you do eventually have to pay it back or it can affect your credit, but for the meantime, there is that protection. 

photo/ Michael Jarmoluk via pixabay

When applying for a car- When applying for a car loan, having a healthy and good credit score is important, as interest rates can be a lot sometimes. Normally if you have a good credit score you can find banks or lenders who are willing to give you a low-interest rate car loan. Saving you thousands of dollars. You should do your research when looking for a car loan. Find a lender that is willing to get you the lowest interest rate possible. The lower your interest rate the lower your payments most likely will be. 

Buying a home- You are going to want to have a good credit score when buying a home, Not only is this process already stressful enough but again you are going to want the best and lowest interest rate that you can get. It’s the same thing with the auto loan, the lower the interest rate the lower your payments will be. 

photo Alina Ku-Ku via Shutterstock

Credit cards and loans- Having credit cards and loans can be a good thing or a bad thing. You want to avoid taking out to high of a loan or having too many credit cards. The more credit cards you have the more likely you are to end up having credit card debt. And no one wants credit card debt. We recommend that if you are going to have a lot of credit cards you use the majority of them for emergencies only. You never know when you are going to need that extra security 

Fixing your credit

As we have read already, having a negative credit score is not a good thing. You are going to see that you have to pay more in bills and that you may get denied for more things. Fixing your credit is your best option. Our friends at credit score API tell us that “fixing your credit score is like changing your life in a better direction.” 

You want to do your research before having someone fix your credit.

Here are some ways you can fix your credit.

  • Knowing your credit score and report- This is the most important and the first place to start. Knowing what your credit score is and what your credit report looks like is essential. There may be things on there that you are able to take care of and able to fix by yourself. 
  • The 30% rule- Some people do not know this, but you do not want to go more than 30% over your credit card limit. The reason being is that banks see that as a safe area of you being able to afford your credit card. Going over could bring your credit score down. 
  • Enlisting in a credit repair service- This might be the best option for most people with bad credit, this being that they have professional credit repair people who can talk with the credit bureaus as well as collection agencies and negotiate for you and get things removed or debt decreased.

A new way of life

We can tell you from personal experience, that fixing your credit will, in the long run, help your life so much more. Having a good credit score is going to determine how much financial freedom you have. We said that earlier but it is because we cannot stress it enough to you. If you want to pay less in bills you are definitely going to need a healthy credit score.  

Author: Jacob Maslow

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