Manage & Monitor

You are here:
  1. Home
  2. Services
  3. Manage & Monitor

Why Does a Good Credit Score Matter?

Your ability to handle financial obligations is reflected in your credit score. When it comes to financial institutions, your apparent level of responsibility is directly proportional to your credit score. According to the FICO model, a perfect credit score is one that is at least equal to or higher than 850 points.

What advantages are there to having a high credit score? The answer can be as simple as improved loan conditions and simpler approval procedures. The majority of people will save hundreds of thousands of dollars over the course of their lifetimes by maintaining a credit score that is good or outstanding. When it comes to mortgages, auto loans, and anything else that requires financing, a person with excellent credit is eligible for cheaper rates.

People who have superior credit ratings are perceived to be lower-risk borrowers, which results in more banks competing for their business and offering better rates, fees, and incentives to those individuals. On the other hand, individuals with bad credit ratings are viewed as higher-risk consumers. As a result, there is less competition among lenders for their business, and more companies are able to get away with charging high annual percentage rates (APRs) as a result.

Your ability to locate rental housing, rent a car, and even get life insurance might be negatively impacted if you have a poor credit score. This is due to the fact that your credit score influences your insurance score.

The length of time you have been on time with your payments is given the most weight in FICO credit ratings; yet, even one instance of being late could lose you significant points.

 

Good Credit 2
sqr031-col1
If you want to be sure that your credit score is accurate, you should check it on a frequent basis. However, you should only do it through “soft inquiries” so that your score isn’t negatively affected. Check with your bank to see if you can participate in their free credit monitoring service and receive alerts whenever your score changes. Many financial institutions provide this service at no cost to their customers.
Improving credit scores can take time and you likely won’t see a huge increase overnight. However, you can potentially speed up the process by having our revolving credit as much as possible to lower your credit utilization percentage inaccurate things removed (especially late payments), or being added as an authorized user to someone else’s old account with perfect payment history, ideally with a low utilization rate. Ideally, this is done by a friend or relative, and they do not even have to give you the card.
How to Build Good Credit 1

Use Credit Monitoring to Track Your Progress

Credit monitoring programs make it simple to track the evolution of your credit score. These services, many of which are free, keep an eye out for modifications to your credit record, including a paid-off account or a newly opened account. Additionally, they often allow you access to at least one of your monthly updated credit scores from Equifax, Experian, or TransUnion. Many of the top credit monitoring services can also aid in your prevention of fraud and identity theft. For instance, you can contact the credit card provider to report suspected fraud if you receive a notification that a new credit card account that you don’t remember opening has been reported to your credit file.
sqr021-col1

How to Build Good Credit

Your credit score can be improved by taking advantage of the plethora of options available to you today. It’s possible that some of them are projects that require your attention over the course of several weeks or even months. Others can be completed in a single day and will assist you in rapidly improving your credit score:
  • Review your credit reports.
  • Get a handle on bill payments.
  • Use 30% or less of your available credit.
  • Limit requests for new credit.
  • Pad out a thin credit file.
  • Keep your old accounts open and deal with delinquencies.
  • Consider consolidating your debt.
  • Track your progress with credit monitoring.
Each of these steps, whether short-term or long-term, will help you improve your credit score and build good credit. Here’s a closer look at what’s involved in each step of the process to build good credit and how long you can expect each step to take. TIP: You’re entitled to a free copy of your credit reports from all three credit bureaus once each year, which you can access through AnnualCreditReport.com.

The Bottom Line

A fantastic objective to have is raising your credit score, especially if you want to get one of the top rewards credit cards or apply for a loan to buy a significant item like a new car or house. When you start making changes to improve your score, it may take a few weeks or even months before you start noticing a difference.

See How Credit Repair could Help you Save

Call (866) 759-9003 or Sign Up Online