What is a Credit Score?
A credit score is a number that represents the risk that a lender takes when lending money. Having a credit score and maintaining it is very crucial to our life if we want to become homeowners, car owners, or even credit card holders. Here are some important information on credit score.
- What is the importance of having a good credit score ?
⇨A credit score controls many aspect of our lives such as getting approved for a credit card, auto loan, and/or mortgage loan. It all depends on how good it is before we can be approved and start our new adventure being a car owner or homeowner.
- What is a good credit score to have ?
⇨ Credit scores vary from 300-850. A credit score ranging from 700 and above is considered good. A score ranging from 800 and above is considered excellent. The average credit score is between 600 to 750.
- What is the importance of having a good credit score when buying a house ?
⇨It is important to have a good credit score because if you need a loan from the bank, one of the first things that a bank looks at is a person’s credit score. In some way, running a client’s credit score ensures the bank that the client is in a good financial position to be given a loan. It also indicates to the bank the client’s ability to repay the loan. How good or bad the client’s credit score is plays a huge factor in whether or not he/she gets approved for a loan.
Try and pay your bills on time and avoid having them go into collection. Some helpful tips are careful budgeting to not over-exceed the amount you can pay back and careful monitoring of how much you use credit for. Set yourself a spending limit when it comes to credit card charges and be firm with yourself. Remember, things that go against your credit may cause repercussions later on when you want to make important purchases. There are even certain jobs that scan for credit history so that’s another factor to consider in the discussion of credit score.
Overall, your credit score is a very important indicator for lending institutions when considering to give you a loan and it is important to try one’s best to maintain a good credit score and be diligent in trying to grow one’s score, especially when planning on buying a Home.