WHY IS YOUR CREDIT SCORE SO IMPORTANT?
Are you tired of being held back by poor credit? Are you looking to improve your financial outlook but don’t know where to start? Don’t worry – you’re not alone. In this article, we’ll highlight five reasons why your credit score is so important. When you understand the significance of your credit score, you can decide to take the first steps toward a better financial future.¹
Loan Approval
Your credit score plays a vital role in determining whether you’ll be approved for any type of loan, from personal loans to auto loans or mortgages. Your credit score is a number typically between 300 and 850 that lenders use to evaluate your “creditworthiness.” This just means your likeliness to pay back what you owe. The higher your score, the greater your chances of being approved for loans.
interest rates
Your credit score has a direct impact on the interest rates you qualify for on loans and credit products. Since a higher credit score indicates that you are a lower-risk borrower, a lender is more likely to extend you a lower intertest rate. And with a lower rate, you can save a substantial amount of money.
Rental Approval
Your credit score is often a factor for landlords when evaluating your financial responsibility and the ability to pay rent on time during the rental application process. A higher credit score makes you a more desirable candidate and could increase your chances of being approved in general and for higher-quality properties.
Financial Flexibility
A strong credit score provides you with financial freedom and flexibility. It allows you to access higher credit limits, better credit products, and more favorable loan terms. With a good credit score, you have more financial options, with greater flexibility.
Emergency Preparedness
Life is unpredictable, and unexpected financial situations can arise at any time. A good credit score serves as a safety net during challenging times, by allowing you access to credit and loans with more favorable terms. Having a strong credit score will also provide greater peace of mind in the case of an emergency knowing you have the credit you need to handle the emergency.
This content is general in nature and does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third party companies, products, or services described here, and take no liability for your use of this information.