Benefits of Improving Your Credit Score


Credit scores: everyone strives to ensure they maintain a good one, but may not always take the necessary steps to get the credit score of their dreams.

It can be hard to get motivated to work towards getting that score if you aren’t seeing the effects of how a bad score can impact your life. Chances are you may have seen some red flags, but didn’t pay too much attention to them.

Here are some of the benefits of improving your credit score:

Lines of Credit

Aside from higher interest rates, a bad credit score can lead you to get a smaller available credit line on your credit cards. This causes problems where you burn through that available credit, think you need more, and then take out another card. This cycle sends many people spiraling into debt without even realizing it. Bad credit can also cause you to have security deposits on utilities, an inability to get a cell-phone contract, higher insurance premiums, and even being denied certain employment opportunities. All of these are effects which many people never even think of.

It reaches all aspects of life!

Most people also don’t realize how big of an impact a good credit score can have on their lives. Bad credit can affect your romantic relationships; bringing financial issues into a relationship can be damaging especially if they are left in the dark about your low credit score and credit issues. A good credit score allows many people to negotiate their interest rates on loans, new credit cards and any other payments which may come with an interest rate such as a car payment. Good credit scores can also get you out of security deposits for utilities, cell-phone contracts, etc. You also will have an easier time being approved to rent a home or apartment. Employers even see good credit scores as a sign of reliability and therefore may be more inclined to hire someone.

It Takes Time!

When trying to improve your score, obsessing and constantly checking your credit report will not do you any good. It is important to be patient and acknowledge the fact that improving your score will take time. Certain debts such as collection accounts, even once they are paid off, may remain on your credit report for 7 years; the same goes for many other debts. It may be your instinct to call and argue to remove them, but that will not help your score. Instead, focus on paying off your other debts and slowly, but surely, you will see an improvement in your score.

Focus and Start Small

While it is a good idea to regularly check your credit score, it is better to take your time and pay off the debts that will have the most impact on your score. Paying off smaller debts very rapidly will not do the job. It will certainly help, but you must go beyond that in order to permanently fix your credit score. Take the time to look at all your debt, make a plan of action for paying it off, and go from there. Creating a budget which includes debt payments is a great way to make sure you stay on track with your goal. Other ways to improve your credit score include closing unused credit cards, paying bills on time, making up missed payments.

Have more ways to improve your credit score? Have a story on how you improved your credit score? Need help managing your debts? Give us a call today or leave a comment below!

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