Why Are Good Credit Habits Important?

April 28th, 2021 by
good credit habits

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What is your credit habit like and why is it better to have good credit habits?

TransUnion identifies a few good things to consider.

A credit score is made up of three numbers starting from 300. The higher the number, the better the score. A good credit score needs to be above 661, a really good score is 721 and above, and a great score is 781 and higher.

Related: How to Stay Organized With Your Finances

One way to keep improving your score is to not use all of your available credit. Even though it’s tempting to max out your credit cards, that can have a negative effect on your score.

Staying within 30% of your credit limit will show lenders you are good with money and this will increase your score.

Related: What is the difference between a FICO Score and a Credit Score?

Check your credit report regularly and if you spot anything that is unauthorized, contact the lender immediately. Any information that might be wrong will have a negative impact on your score.

Paying your bills on time is a simple way to have a real positive effect on your score.

All this work to improve your score does have its benefits. You can get lower interest rates and higher spending limits. It can help secure a better mortgage and if you are renting, open up more rental options.

 


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