Your Credit Score Gives You Access to Credit Opportunities
Knowing your credit score and what that score means to prospective lenders is an essential part of your financial literacy. Credit scores and credit reporting are a way for lenders to make informed decisions on whether they will accept you as a customer and how much of a risk to repay they believe you pose.
The lower the risk, the more likely you will be approved with lower interest rates or repayment terms. The higher the risk, the more likely you will be approved with high-interest rates, or you may not be approved at all.
Credit Scores Have Fairly Standard Break Downs
Depending on the score used – the most popular models are the FICO score and VantageScore – a score of 700 or above would be considered a ‘good’ score to most credit companies. A score at this level increases your chances of being approved for credit and would likely receive agreeable rates from lenders. Any score above 800 is considered ‘excellent’ and would certainly be approved with the best rates of terms available. .
While a ‘fair’ score of 580 and above will generally have access to credit accounts, the rates and offers available will typically be far more expensive to the consumer than it would be with a higher credit score. Of course, with ‘poor’ and ‘very poor’ scores, customers would have a hard time obtaining approvals of credit applications and may be required to pay down payments or offer collateral in order to be approved.
Maintaining A Good Score Takes Consistency
Having a high credit score does not happen overnight, and it does not happen after a couple of months of starting a credit history. It takes many months and years of positive payment history – on-time payments, not spending over your credit limit – and a mix of accounts and low credit utilization to keep a stellar score.
Take Steps To Increase Your Score Today!
The first step to increasing your score should be to immediately ensure all of your accounts are current! Having past-due accounts and carrying high balances on your accounts can significantly lower your credit score.
You should also make sure your credit report is accurate when considering how to increase your score. One in five consumers has an error on their credit report, decreasing their chances of receiving credit or favorable loan terms. Your score is calculated off of the information in your credit report, so if you see a mistake or an error of any kind, it could be negatively impacting your score and ultimately your credit opportunities.
We Can Help You Maximize Your Credit Potential!
It can be daunting starting the journey to increase your credit score, especially if it is not as high as you thought it would be! That's why our experienced team of professionals are here to guide you along the path to meeting your credit goals. Our Credit Helpers work with you to identify opportunities to repair your credit report and raise your score. Contact us today for a personalized credit plan to help your specific credit needs!
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