To most people, a bad credit score minimizes the chances of securing a loan. Therefore, if you have a bad credit score, you need to find ways to improve it. According to financial experts, your FICO score is considered your financial DNA. Hence, you need to learn how to save money and protect your credit score so that you can acquire huge loans for various investment projects.
As much as your credit score is yours, your credit score is also someone else’s business; credit bureaus are responsible for determining your credit score. Depending on our financial practices, these credit bureaus assign you a score between 300 and 850, whereby 300 indicates a poor credit score, whereas 850 is a perfect credit score.
Bad Credit Is Costly
When applying for a loan, having a bad credit score can cost you thousands of dollars in additional charges. You might have heard a saying that says, “buy with money, pay once; buy with credit pay thrice.” This refers to the interest commonly linked to loans. Loan interest is the amount of money paid by the borrower on top of the loan.
With a bad credit score, the creditor is tempted to charge you high interest to cover for the risk of defaulting. Also, home and car insurance companies may charge you a slightly higher premium than someone with a good credit score.
A Credit Score May Influence Your Chances of Getting a Job
Lately, employers have been looking at the credit reports of their potential employees. Therefore, your creditworthiness may determine whether an employer hires you or not. As much as restrictions have been put to limit the access of employees to your credit score, the limits are porous and do not guarantee that the employee would check your credit score.
Hopefully, you have noticed that your credit rating is a significant indicator of your financial health. Taking necessary actions such as lowering your loan usage will positively affect your credit score hence saving you a lot of money.…