You probably know that you have a credit score, but you don’t know exactly what it is. If you are curious as to what credit is and how it works, here is what you need to know about your credit score.
What Is Considered Good Credit
Credit scores can range from 300 to 850. A credit score that is at least 670 is generally considered good. Most people have a credit score that is anywhere from 600-750.
Why You Need Good Credit
You need to have good credit for a variety of reasons. If you want to buy a house, purchase a car or finance almost any type of item, you will need to have a score that is considered to be favorable. The higher your score is, the less interest you will pay over the life of the loan. If your score is too low, then you will pay a higher interest rate. In some instances, you may not be able to get approved for a loan.
Things That Affect Your Credit Score
There are all sorts of things that affect your credit score. The amount of revolving debt that you have will affect it. The number of credit inquiries that you have can also lower your score. If you pay your bills late, then that will affect your score as well. In fact, your payment history influences your credit score by about 35%. This is why it’s important to always pay your bills on time.
Options for Less than Perfect Credit
Rebuilding your credit does take some time. This is why you need to develop good habits in your daily spending habits. If you want to rebuild your credit, here are some things that you can do:
When you have a lower credit score you may have less options available to you for credit cards or loans. However, you won’t be completely denied the funds when an emergency comes up. Many payday loan lenders will still consider you based on other checks.
In many instances, you can apply for payday loans online without perfect credit, and apply from the comfort of your own home. If unexpected emergency expenses do arise, you should use your savings before you resort to getting a payday loan. However, a payday loan can be very beneficial if you don’t have the extra funds to pay these sudden expenses. In order to be financially responsible, customers should pay off their payday loan as soon as possible.
Ways to be Financially Responsible
Download A Budgeting App- You may find that a budgeting app to be very helpful. These types of apps will allow you to create a budget, and you can use it to determine where you need to allocate your money. You can use any extra money that you have to pay off your debt. This will allow you to raise your credit score. Because these apps can be downloaded right to your phone, you can check your budget anytime you want to. This will allow you to feel in control of your finances at all times.
A Mixture of Different Accounts- Installment debts are things like mortgages or automobile loans, whereas revolving debts are credit cards. These loans do show on your credit report so make sure to make full payments on time and remain in good standing with any loans you have.
Utilize Online Banking- Over-drafting your bank account is never a good thing. This is why you need to utilize online banking. You can see how much money you have in the bank at all times. This will help you avoid spending money that you don’t have.
In conclusion, it’s important that you have a good credit score. Making loan payments on time is just one way to be financially responsible, there are several other ways so do your research and start building a healthy financial profile today. By utilizing the above tips, you can ensure that your credit is where you want to be.