Credit Rehab: 6 Reasons to Fix Your Credit Today
Credit is a privilege, not a given. Loop21 will help you raise your FICO score with our 3-part series, "Credit Rehab."
You can run from it, you can can hide from it, but your credit score is one set of digits you can't ignore for long. Whether you want to make major life purchases or send your kids to college, keeping your FICO Score, which ranges from 300-850, above 720 should be one of your main personal goals.
-Get the best interest rates. When you get ready to borrow money, your credit score will be a huge factor in what type of interest rate the lender will charge you. If you have a low score, it's likely that you're not going to get the best, meaning the lowest rate – that reward goes to those with the best scores as they are seen as lower risk.
--Land the job you want. Increasingly, employers are not just looking at your resume and checking references. They are also looking at your credit score. A low score could make a potential employer look at you sideways, wondering if you can't manage your money do you really have the right stuff to do the job.
--Help a landlord say yes. You're apartment hunting and you talk a good game to the landlord. You have a salary that would be able to handle the rent, but landlords know that what's on paper and what's in play can be two different things. A landlord will look at a credit score to see how you manage that salary. If you're tapped out on your credit cards, the landlord might have doubts that you will be dependable month after month with the rent and decide to just say no.
--Impress an insurance company. Many providers of car and homeowner's insurance consider your credit score when they are deciding on your premium rates. Again, if you aren't doing right by your creditors, they could perceive you as a higher risk for them too. So while they will go ahead and insure you, they just might charge you more.
--Get that home sweet home. Home ownership is still the American dream. Lenders have learned lessons from the housing bust and they have tightened up their lending practices. They aren't giving out mortgages if you don't jump through a few high hoops. Your credit score is critical when you're applying for a mortgage. They want to see a squeaky clean track record; they want to see that you have consistently paid your bills on time and that you aren't in over your head in debt. A low credit score can be a key factor in keeping you out of that dream house
--Circumstances change. You might be thinking that there's no rush to repair your credit, but things change. You could find yourself out of a job and suddenly looking for work, or you might unexpectedly have to move. Truth is, stuff happens, and a good credit score can make all the difference.
How has your credit affected your personal goals? Share your story below!