Main Reasons Why You Should Keep Your Credit Score As High As Possible
Your credit score is important because it is the metric that is used to determine whether you get a loan as well as the rates you pay for that loan.
A good credit score can help you to leverage better deals on loans, credit cards, insurance premiums, apartments, and cell phone plans. Conversely, a bad score can result in you being declined for loans or having to pay higher rates.
Over your lifetime the cost of higher interest rates from bad or average credit can exceed six figures, making it in your best interests to focus on making sure your credit score remains positive, it can end up saving you money in the long-term.
Some Practical Examples
Let’s take a look at an example to illustrate the effect of this.
If you have a FICO score in the 620 range would pay $65,000 more on a $200,000 mortgage than someone who had a FICOs over 760. (FICOs and VantageScores are on a 300-to-850 scale.) On a five-year $30,000 auto loan, if you have a lower score, you could end up paying $5,100 more than someone with a higher score. The same applies to a home equity loan. A 15-year home equity loan of $50,000 would cost someone with a low scorer $22,500 more than someone with high scores.
It is obvious that your credit score plays an important role in your life and can have a deep impact on your finances. Keeping track of your score is important as well as doing whatever you can to maintain a healthy score so that when you are ready to apply for some sort of credit, you get the best deals. It is possible to build, defend and take advantage of great credit regardless of your age or income.
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