Boost your credit score and save money in the long-run!
In the world of personal finance, few metrics wield as much influence as your credit score. It’s often misunderstood and its impact can stretch far and wide. Understanding the breakdown of your score is a vital component to your financial wellbeing and can potentially open doors to an abundance of perks and opportunities.
In this article, we’ll discover the perks to improving your credit score, along with ways to get started!
Save money with lower interest rates and insurance premiums
Improving your credit score can lead to lower interest rates on loans and credit cards. Lenders consider your credit history to evaluate the risk of lending you money. A strong score demonstrates financial responsibility, making you a more attractive borrower and potentially saving you money.
In addition, insurance companies also factor your credit scores when determining premiums. Again, a higher score suggests greater financial stability and responsibility, which insurers associate with reduced risk. This may allow for lower insurance premiums on auto, home, or renters policies, resulting in long-term cost savings.
Enhance borrowing power and approval odds
Improving your credit score can improve your borrowing capacity for the things that matter most, such as purchasing a home, financing higher education, and much more. It also opens the door to better credit card offers with higher limits, affording you greater purchasing power and flexibility.
Your chances of approval also increase when your score is higher. Whether you're applying for a mortgage, auto loan, or personal line of credit, lenders are more inclined to extend credit to individuals with a proven track record of managing debt responsibly.
Reduce financial stress
One of the most underrated perks to improving your credit score is the decrease of financial stress. A strong score can provide peace of mind knowing that you have the financial foundation to weather the unexpected and pursue your long-term goals.
Ready to start improving your credit score?
There are a number of ways you can start improving your credit score. Start by only obtaining the credit you actually need. Make sure to not utilize more than 30% of your limit when you use it and always pay any cards or loans on time.
It’s also important to fact check your credit reports. You have the right to get a copy of your report from each of the three major reporting agencies — Experian, Equifax, and TransUnion — once a year for free. Review yours and report any errors that might hurt your score. Pro tip: One of the perks to opening an Absolute Checking® account is your access to IDProtect®, an identity theft and credit report monitoring service.
Remember, March is National Credit Education Month and we have lots of resources to discover on our blog, The Clear View. Our financial literacy app, Zogo, also has courses dedicated to all things managing money.