Why it is Important to Maintain A Good Credit Score
Having a good credit score is extremely important for everyone. At the end of the day, loans are a necessary part of life for most people!
Developing and maintaining a High Credit Score can strongly benefit you for future lending and flexibility with the banks! Having a low or questionable Credit Score can impact many different facets of your life negatively!
Ultimately what your Credit Score tells a lender is how steadily you pay your bills on time, your history of late payments and how high your Debt load generally stands in comparison with your available credit.
1. Buying and Owning a House
Purchasing a house is one of the greatest investments you can make in your own future! It’s also one of the most difficult ones to achieve if you don’t have a good credit score. As a result of the booming house market banks have cracked down on their lending rules. Your Loan to Value Ratios are not only determined by your income but also your history with the banks and most importantly your credit score. With a lower Credit Score banks will still approve you however at much higher interest rate than the standard posted rates being offered at the time.
2. Getting a Credit Card or Increasing a Credit Limit
Credit Cards are used in most people’s daily lives. Having a good Credit Score and a good history with the bank for making minimum payments and holding a low or consistent balance can help to increase your Credit Limits or approve you for new Credit Cards in the future.
3. Buying a Vehicle
This is a common purchase and milestone, and many individuals take out loans when they buy a vehicle. Car loans are much smaller than house loans, so they’re typically easier to get with a poor credit score. Nonetheless, a poor credit score will only qualify you for high interest rates and a larger down payment on a vehicle. This can mean you pay thousands more for the same car compared to someone with good credit and that is just money down the drain that can be avoided with the correct planning.
4. Getting Lower Interest Rates
While a good credit score is an important factor in obtaining any type of financial assistance, many banks are still willing to give loans to individuals with poor credit. If your credit is damaged, you will have to provide more information when trying to get a loan and as a result you will get hit with a higher rate.
5. Romantic Relationships
It may be alarming, but your credit scores can impact your future Romantic Relationships and Personal Lives. When applying for a new home loan with that special someone having a lower credit score can impact your approval and over all ability together to purchase future big ticket items such as a car and a home.
To avoid all of this and to save yourself money in the long run here are a few tips to maintain a higher credit score:
· Always pay your monthly minimum payment
· Try to maintain a balance on your Credit Cards below 70% Loan to Value Ratio
· Pay off your Debts in Mass amounts when Possible
· Manage your Credit by spreading your debt load over different Credit Cards if Applicable
· Update your personal information with Equifax and ensure all old Credit Cards etc. are removed
Make Your Approach~The Fresh Approach!
The Fresh Approach Real Estate Team with Keller Williams Realty Solutions,
Allana Thompson, Christy D'Oliveira, Kyrsten Feere
Allana- 416-567-2018 firstname.lastname@example.org
Christy- 647-261-8910 email@example.com
Kyrsten- 905-577-2608 firstname.lastname@example.org