Consumer tips: Take charge of credit scores for healthy financesPosted: Updated:
Healthy credit can give consumers the financial edge they need to achieve milestones like buying a home or an apartment, financing an advanced degree, purchasing a car, funding a passion project or getting a small business off the ground.
However, many consumers may not understand the importance of credit health and the major role credit plays in their life, both today and in the future. Mike Sullivan from nonprofit credit counseling agency Take Charge America shares some credit knowledge that all consumers need to know.
1. A credit score below 680 will cost you money - a low score means higher insurance rates, fewer job options, higher interest rates on credit cards and loans, and therefore higher costs for many life necessities.
2. Your credit report probably has an error on it - Credit reports frequently have errors, and some of them can be costly and even be evidence of fraud. Checking credit reports regularly is critical to avoid serious consequences.
3. The credit score you see is not the same as the one lenders see - There are "mortgage scores" and "auto loan scores" that are specific to certain kinds of lending. These are somewhat different from the score a consumer buys.
4. Having poor credit does not keep you from getting credit - Even bankruptcy filers are offered credit. It just happens to be on terrible terms. Poor credit usually means paying more for credit rather than not getting credit.
5. Credit ratings go down faster than they go up - A 30-day late payment might cost you 10 points. Paying that bill on time next month will not raise your score 10 points. It takes months of good behavior to recover from one mistake.
For more information or financial advice for credit counseling, housing counseling, student loan counseling and debt management services, contact Take Charge America.
Take Charge America