The Importance of a Good Credit Score
Your credit score and credit report are two vitally important things that can aid you on your journey to financial success. By taking control of your finances today, you can reap better rewards tomorrow.
What is a credit score?
A credit score is a numerical showcase of your financial reputation. It’s one of the main factors that contribute to your credit report and aids banks and employers who want to know more about you.
What is a credit report?
A credit score is a numerical showcase of your financial reputation. It’s one of the main factors that contribute to your credit report and aids banks and employers who want to know more about you.
Why it is important to have a good credit score:
Before you can be granted credit for your dream house or first car, lenders and banks will check your credit score to determine how much of a risk you are and what the likelihood is of you repaying your loan. A low credit score could cause you to have higher interest rates on your loans and can even result in you being denied the credit you really need.
Maintaining a good credit score is crucial as it can have a drastic impact on your life. You cannot outrun a bad credit score, so try to avoid these common financial missteps and keep your credit in check:
- Making late payments. Missed payments or unsuccessful debit orders shows poor budget management and irresponsibility. Have a look at this post for ways to keep your credit score in tip-top shape and save cash in the process.
- Keep outstanding account balances low and do not take on too much credit. Ensure your credit card limit is set as low as possible. Remember, all outstanding debt will be offset against your earnings and assets to check affordability.
- Not being aware. Make sure to keep track of your credit history and report any inaccuracies you may find, including identity theft.
- Having no credit history can also be detrimental. A credit record is built by taking out credit such as a cell phone or store account, or a loan from a bank. You will need to build up a record over a few months before it could be assessed as an adequate record.
Keep track of your credit score
Your credit and payment history are tracked by various credit bureaus. All consumers are entitled to receive one free credit report annually. You can also contact them if you need to check your credit record, but there is usually a cost involved.
A credit score works on a scale (noted below). Generally, a score above 670 is regarded as a "good" score and below 600 as "high risk".
781 to 850 - Excellent
661 to 780 - Good
601 to 660 - Fair
500 to 600 - Poor
300 to 499 - Very poor
It is vital that you keep an eye on your credit because, depending on the severity of the issues, it could take upwards of three months to a year to turn around a poor credit profile.
Being informed and vigilant when it comes to managing your credit will help you to achieve your future financial goals. Now that you have more information regarding your credit history, contact our member agents to enquire about who the top bond brokers in the area where you would like to buy is. The bond brokers will assist you for free with a home loan assessment to see what type of bond you qualify for.
Being informed and vigilant when it comes to managing your credit will help you to achieve your future financial goals. Now that you have more information regarding your credit history, contact our member agents to enquire about who the top bond brokers in the area where you would like to buy is. The bond brokers will assist you for free with a home loan assessment to see what type of bond you qualify for.