Credit score matters?

Why do Credit Score Matter?

Your credit score is the main criteria which entitles you to a fresh credit loan. To calculate credit score you need to follow certain steps and to raise credit score, you need to improve upon your financial dealings with your existing creditors to be in their good books. It is the manipulation of money transactions in your credit accounts by which you will be able to improve your credit score. Credit score matters a great deal because of the following reasons:

  1. All money lenders whether they are banks, credit institutions or private lenders, will want to calculate credit score before giving any credit. It is your credit score which signifies your financial status depending on which creditors take their decisions.
  2. Your credit score will vary depending upon the balance of your outstanding credit balances of all accounts. If the balance of your credit is below 30% of your credit limit, you raise credit score. All your outstanding credit balance of your existing accounts are reported to credit bureaus. This information is used to calculate credit score. If you can limit your balance to below 30%, you will improve upon your credit score.
  3. Your credit score will not only count on your entitlement for further loan, but also will be a factor towards your employment or renting of an apartment.
  4. An average credit score is in between 700 to 750 which will enable you to be in the good books of creditors who are only concerned with your credit score. A good credit score can help you to qualify for a business, mortgage or credit card loan.
  5. Auto insurance and home insurance companies give enough importance to the credit score in determining the rates and premiums.
  6. If you have to rent an apartment, you need to have a good credit score. Any Landlord will be convinced about your financial stability and will be willing to rent or lease out the premises. No security in the form of money deposit will be required.
  7. Most employers are conscious about credit score and will want to verify it before giving you employment. A bad credit score may affect your chances of a good job, because it is your credit score which reflects your responsibility towards your financial liabilities. Employers will surely judge that part before taking any decision.
  8. To avail a good plan for your cell phone, you may be required to show evidence of your credit score to satisfy the service providers. Your good score will enable to opt for the best plan rates and benefit in the long run.

You should always keep a watch to raise credit score which will create an opening in all sectors of life. Young generation should be specially be aware of the importance of credit score as they have their entire life ahead. Keeping up a good credit score will lead them towards a happy financial life not having to worry on these matters and rather concentrate on their career.