If you are like me, you’ve probably taken student loans to cover your college tuition fees, and this means that now you have raked about 100k of debts. And paying this back will be a real hassle, and this will usually worsen your credit score. Whatever people tell you, this is a big deal, and you need to be careful when it comes to spending money and using your credit card.
If you live in the United States, then you know that your credit score matters and is important for you to get loans in the future. This will negatively affect your credit score if you don’t repay it in time, which will ultimately be your Achilles heel. So, without further ado, let’s dive into this blog and learn more about credit scores.
1. It’s just a number
Yeah, and money is just paper, but we live in a capitalist society where we need money to get through life. Money is the root of all evil, but it is also something that we need if we want to live a comfortable life. It is a double-edged sword if you ask us.
A credit score is a three-digit number that is usually used by financial institutions and lenders to evaluate your ability to repay debts on time. A credit score and credit report are different; the latter is a list of your credit accounts and activity used to calculate someone’s specific credit score.
2. The higher, the better
This is a go big or go home kind of situation, and the higher your credit score, the more likely a financial institution is going to approve your loans. In actuality, you have multiple credit scores, and this is because different companies provide these, and each one has its own systems. Each of them has varying ranges and calculations.
FICO (Fair Isaac Corporation) score tends to be the most common, and they base their score range from 350 to 800. A score of 750 or higher is most likely for you to get approved when it comes to getting better interest rates. How is the FICO score calculated?
- 35% of your payment history
- 30% of the amount owed
- 15% of the length of your credit history
- 10% of credit mix
- 10% of new credits
3. Repay on time
This is something that we tend to forget, but missing out on payment is bad for your credit score and will only decrease your credit score even if you are late on one payment. If you are going to ask for another loan, the lender will do a background check and will check your credit history.
Delays in payment will make them wary of lending you money, and if they do lend you the money, you will have lousy interest rates. As stated above, 35% of the FICO score leans on your credit payment history, and this may make or break your chance of getting the loan you need.
4. Ask for help if you need it
You won’t get far in life if you are afraid to ask for help, especially with something you have little to no knowledge of. Go to your financial institution and local Chase and ask them for help. They will help you out with all your questions and queries. There is no shame in asking for help; remember that if you are having any issues.
If you already have debts, this can get you worse interest rates, and talking to a financial professional will only help you out in the long run. They are in the best place to give you advice on what you can and can’t do to get a better interest rate on your new loan.
Looking for help?
Find out what kind of home mortgage loan best fits your need, and getting help to find what you need can be pretty tricky. This is why we would advise people to get help when it comes to this. For all your mortgage support and needs, contact Sunland Capital Mortgage Corporation.
Located in Florida and with over 2 decades of experience in mortgage counseling, they are leading expert loans and will advise you on the best option and lowest rates you can get on these. So what are you waiting for? Make your dreams become a reality with the help of Sunland Capital Mortgage Corporation.