S3E6: True or False: Your Credit Score can make or break your financial independence!

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Your credit score and credit history have a huge impact on your life. You might already know that credit scores impact your ability to get a loan and how much it will cost you. But did you know that your employment, cell phone bill, insurance and your ability to get cable could balance on your credit score?

What Is an Accredited Investor?

https://www.investopedia.com/terms/a/accreditedinvestor.asp

How Does Your Credit Score Impact Your Life?

Your score can mean approval or denial of a loan.

But credit scores don’t just come into play when you’re looking for financing.

1. RENT: Landlords, property managers and rental agencies typically review potential tenants’ credit reports. They look for a pattern of missed payments or other negative information on your credit reports that indicate you may not pay your rent.
2. MORTGAGE: Mortgage lenders review your credit scores and reports from the three major credit bureaus as part of the application process.

A lower credit score can result in a higher interest rate. And just a small change in your interest rate can mean a much more expensive home.

• A $250,000 mortgage at 4% interest for 30 years equals a monthly payment of $1,194 and a total cost of $453,773.
• Borrowing the same amount at 5% interest for 30 years equals a monthly payment of $1,342 and a total cost of $507,139.
• Just a 1% increase in interest generated a $53,356 increase in cost over the life of the loan.

Your Access to a Wide Range of Conveniences and Necessities

Your score can make it impossible or much more expensive to get funding or even sign up for necessary services like utilities and internet, insurance, or even a job or partnership!

So what’s considered a good credit score?

Your credit score and credit history have a huge impact on your life. You might already know that credit scores impact your ability to get a loan and how much it will cost you. But did you know that your employment, cell phone bill, insurance and your ability to get cable could balance on your credit score?

How do you build a strong credit score?

Available Free Credit Reports:

https://tinyurl.com/Experian-Free-Report

https://tinyurl.com/Free-Annual-Credit-Report

Dispute Errors on Your Credit Report

This resource from the Federal Trade Commission will walk you through the process of disputing credit report errors step-by-step.

Pay Your Bills on Time

This may sound like a no-brainer, but it’s hard to stress the importance of being prompt with paying your bills enough.

Reduce Your Credit Utilization Ratio

Your credit utilization ratio, simply put, is the percentage of your available credit that you’re currently using.

According to Experian, “your credit utilization ratio should be 30% or less, and the lower you can get it, the better!

Request Credit Limit Increases

A simple way to reduce your credit utilization ratio is to get a credit limit increase.

Avoid Opening New Lines of Credit

The length of your credit history accounts for 15% of your credit score.

The longer your credit history, the better your credit score should generally be, and vice versa.

Pay Off Your Balance

Let’s go back to the credit utilization rate, where the less percentage of available credit you use, the better.

Become an Authorized User on a Credit Card

Some experts even say this can help you achieve a credit score of 700 or higher after a few years.

Have a Variety of Credit Accounts

• Revolving credit – Accounts where you can repeatedly borrow and repay up to a specific limit (unsecured credit card, secured credit card, and credit lines)
• Installment credit – Accounts where you borrow money in one lump sum and repay it, typically with interest, in installments (mortgage loan, auto loan, student loan, or any type of installment loan)
• Open credit – Accounts where the debt balance has to be paid in full each month

Avoid Closing Old Credit Cards

With a longer credit history, you’re more established — something lenders prefer over borrowers with little to no credit.

In Conclusion:

As you build your credit consistently following the steps I laid out for you here you will not only increase your financial opportunities you’ll be developing powerful habits towards a healthy money mindset.

Start Your Free Wealth Coaching: Text me at 508-905-5561 with a couple dates and times and let’s begin building a financial wall around your family.

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The post S3E6: True or False: Your Credit Score can make or break your financial independence! first appeared on The Family Business.

The post S3E6: True or False: Your Credit Score can make or break your financial independence! appeared first on The Family Business.