Virtually everyone has been told about the importance of maintaining a good credit score. You’re told that if you work hard and pay your bills on time, good credit will follow. However, few people understand the extent to which good credit affects your financial options and opportunities, or how bad credit will cost you money in a myriad of ways.
There are three credit reporting bureaus that collect information about your debt and payment information. Those agencies create credit reports and assign a FICO® Score that lending institutions use to determine if they will loan you money and the interest rate you’ll pay.
A good FICO® Score begins at 670. A score of 740 will get you above average interest rates. The closer you get to a score of 850, you’ll qualify for the lowest interest rates on loans and credit cards. The problem with credit reporting bureaus is that they don’t share information between each other, it’s easy for misinformation to creep in, and all your debt and payment information isn’t collected or reported.
How Credit Scores are Used
Credit scores obtained from any of the credit reporting agencies are used to make important decisions about your everyday life from your ability to obtain employment and rent an apartment to opening a bank account. Your credit score will be used to determine the interest rate you pay on loans and credit cards, the ability to obtain a mobile phone, turn on utilities in your name, and purchase insurance.
Good Credit Benefits
The better your credit rating is, the less you’ll pay in finance charges and interest rates will be some of the lowest offered. You’ll be approved for higher credit limits, it will be easier to rent in better neighborhoods or purchase the house of your dreams, and you’ll receive better rates on your insurance needs.
Reduced interest rates and finance charges means you can pay off debt quicker, which in turn helps you save money and continues to boost your FICO® Score. It’s a revolving cycle that will continue to bestow benefits as long as you maintain a good credit score.
For more information about how The Sena Group can help you with any
of your insurance needs, please contact us at 561-391-4661.
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The Sena Group
6501 Congress Ave., Ste. 100
Boca Raton, FL 33487