Why Good Credit Matters

Ever wonder exactly why good credit matters so much?

Homes

Before you can buy a house, mortgage lenders want to know that you won’t default on your mortgage. Having good credit matters because the lender will consider it risky to give you a mortgage loan if your credit score is too low.

Cars

Your score affects whether you are qualified to buy a vehicle, total amount, and loan interest. Applicants with a higher credit score can qualify for larger loan amounts with lower interest rates.

Jobs

Many employers conduct credit checks as part of the hiring process. If you haven’t demonstrated financial responsibility, a prospective employer might be hesitant to hire you.

Insurance

Insurance companies use the same information other lenders look for. This includes your history of on-time bill payments as well as how much debt you owe. What insurance companies learn about your credit may help them determine how much you’ll pay in premiums.

Phones

If you have poor credit, some cell phone companies may require a security deposit or ask you to prepay when opening your account. Good credit may help you avoid those up-front costs.

Utilities

With poor credit you may have to pay a deposit, provide a letter of guarantee from someone who agrees to pay your bill if you don’t, or be denied service altogether.

Frequently Asked Questions

We’ll show you why good credit matters!

Establishing a good credit score is vital for your overall financial health.. When you have a good or excellent credit score, you’ll have an easier time being approved for renting an apartment, you’ll get better rates on car and homeowner’s insurance, and it’s cheaper to borrow money when you need it.

Credit scores fall within a range of 300 to 850, with 300 being very poor and 850 being excellent. Credit score ranges vary based on the credit scoring model used and the credit bureau that pulls the score.

FICO Credit Scores range from 800 and above, which is exceptional, to below 580, which is poor.

“Excellent” is the highest tier of credit scores you can have. For FICO, it falls between the range of 800 to 850. A perfect credit score of 850 is hard to get, but an excellent credit score is more achievable.

A bad or fair credit score can have a big impact on your overall financial life, influencing the type of loans and products you can get. It’s less likely you’ll be approved for credit cards or loans, and if you are approved, you’ll get less favorable loan terms

Having a good credit score isn’t as easy as just paying your bills on time. There are several factors that go into determining your overall score.

Payment history (35%): Whether you pay your credit card bills on time.

Amounts owed (30%): The total amount of credit and loans you’re using compared to your total credit limit, also known as your credit utilization rate.

Length of credit history (15%): The length of time you’ve had credit.

New credit (10%): How often you apply for and open new accounts.

Credit mix (10%): Having a variety of installment loans and revolving credit accounts, including credit cards, auto loans, mortgages and personal loans.

Once you understand how your credit score is calculated, you should check your score. This will give you insight into what products you may qualify for and what interest rates to expect. If you have a low score, you can take steps to improve it. If you have a good or excellent score, you can work to maintain it. You can request a free copy of your credit report from each of three major credit reporting agencies once each year at AnnualCreditReport.com

While some companies charge you for daily or monthly monitoring of your credit score, there are several that do so for free. Self, Credit Karma, Credit Sesame, and CreditWise are four companies that offer credit score updates, identity theft insurance or alerts if your Social Security number gets used.

It sure does. When you cosign for someone else, you are accepting full responsibility for the debt if the other person does not pay as agreed. A cosigned account will appear on both your credit history and the other person’s. All loans and credit card accounts that appear on your credit report will impact credit scores.

Ready to see what good credit will do for you?

Here at Credit Repair Express, we have the resources and expertise to get you the positive results you need for your financial future.

Get Started for $1