How Improving Your Credit Will Help Your Future

How Improving Your Credit Will Help Your Future

It’s been said time and again that it is essential to maintain a good credit score, but how much of that is true and how will it benefit your finances now and in the future?

What Improving Your Credit Can Help

The benefit of having good credit in times like this? You will be more eligible to get a loan or get approved for a credit card to help compensate for added costs. Take a look at these tips detailing how boosting your credit will help your mortgage payments when you buy a home and more!

  • Purchasing a home can be a pretty intimidating ordeal, but did you know that in some cases you may be saving money by purchasing a home instead of renting? By boosting your credit score and saving money for a down payment, your monthly mortgage bill could be significantly less than paying a monthly rent due to the lower interest costs accrued by having above average credit. Take a look at Mortgage Advisor’s mortgage calculator to see how much you could save based on your credit. 

  • It’s nearly impossible to plan for unexpected emergencies, and no matter how good your credit score is, you may be in need of some extra cash when those emergencies arise. The benefit of having good credit in times like this? You will be more eligible to get a loan or get approved for a credit card to help compensate for added costs.

  • Interest rates for buying cars can be as high as 25% depending on how tarnished your credit is. Ensuring your credit score is always in the green allows you to be able to get the best interest rates when purchasing a car, and even be eligible to lease a car for lower monthly payments.

How to Improve Your Credit

Now that it’s been established that the benefits of maintaining above average credit are high, what are the next steps? Take some of these actions to help keep your credit score as high as possible. 

  • Make sure you keep your credit card balances below 30%.

  • Pay all your bills on time - not just credit cards, but everything! Your rent, phone bill, electricity and cable bills also affect your credit.

  • Take care of those student loans. They may be tedious, but you can apply for an income-based payment plan to ensure you are not suffering from student loan debt.

  • Make periodic payments on the principle of your loan. This is an option! If you are up-to-date on your payments and have some extra cash you’d like to go towards a loan you have, give the loan company a call to see if you can make a payment on your principle. This will allow you to make a payment on what you actually owe, and not on any interest currently accruing.