How Important is a Good Credit Score in 2022

Credit scores can have a profound impact on our finances. For example, a good credit score could mean better terms on your loan. It could also be the difference between being approved or denied for a loan in the first place.

But, what is a credit score, and what is a good credit score to have? Let’s go through all the in’s and out’s of credit and how it can affect your finances.

What Is a Credit Score?

Let’s start by first defining what a credit score is. Essentially, a credit score is a number ranging from 300 to 850 to help lenders determine the likelihood that you’ll pay your loan back to them.

What Factors Impact Your Credit Score?

Paying Your Bills

More precisely, paying your bills on time will have a significant impact on your credit score. In addition, keeping up with all bills, including credit cards, utility bills, cell phone bills, mortgages, and any other bills you might have, will boost your score significantly.

Your Debt

The amount of debt you are carrying will also affect your score. There is more to it than the amount of debt, but the easiest way to think about it is the less debt you have, the better.

Credit cards can be a double-edged sword. Using them will help build credit, but too much will hurt your credit score. You want to continue using and paying off your credit card each month, but try to keep the number of charges well below your credit limit.

Credit Card Usage

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