Proper money management is a difficult task. Does it feel like there’s never enough time and money to go around? You wouldn’t be alone in feeling this way: nearly half of Canadians live paycheck to paycheck.
When you don’t have enough money in your wallet, relying on credit can be a big help. A strong credit score can allow you to navigate the financial world comfortably even when you don’t have the money you need currently in your possession.
What can do with good credit? And what is considered a solid credit score? Whether you’re new to the world of credit or just need a refresher, there’s a lot of information to cover. Read on, and we’ll walk you through what you need to know.
Why Are Credit Scores Important?
There are many reasons in your life where you may need to borrow money.
You may want to open a business and need the funds to get going. You may want to purchase a home and need to get a mortgage to do it. You may just be down on your luck and need some support to cover overwhelming costs that are coming your way.
Your credit score will be the main decision-maker in how easy it will be to get this money. This three-digit number is a representation to money lenders of all stripes of how reliable of a borrower you are. The higher your score is, the more secure a lender will feel in giving you money as they expect to get it back.
The lower your score is, the more you will be seen as a risk and a potential liability. Many lenders won’t even sit down to meet with individuals with a low credit score.
That’s why it can be so vital to understand your credit score and to keep it as high as possible. You might be preventing yourself from being able to make life moves later on if your score is too low.
What Is A Good Credit Score?
Having a strong credit score can make a world of difference in a number of different financial situations. But what is a good credit score?
Most scores are graded on a scale from 300 to 850, with 300 being the lowest and 850 the highest and therefore the best. The higher your score is the better your credit is. A score of 800 or above is considered excellent, but it’s not a score that many people get and it’s hard to reach this high.
An average credit score is usually between 600 and 750. This is considered a good credit score, though even in this range the higher score can make a big difference in your success rate with lenders.
There is more than one kind of credit score out there, though the FICO score is the most common. On the FICO scale, a score of 670 or higher is typically considered strong. There is also a Vantage Score, which is only slightly less popular of a grading scale. On this scale, anything above 700 is considered to be strong.
Not all lenders have the same beliefs and considerations when it comes to looking at applications. A credit score that might be weak to one lender might be considered perfectly fine to another. That’s why it’s important to seek out different lenders and find one that is the perfect match for you.
What Can You Do With Good Credit?
Good credit can open a lot of doors for you as a money borrower. When you set a new goal in your life, like becoming a homeowner or purchasing a new car, your credit score will be there for you. It can make achieving these things much easier.
When you need a loan, the credit score is the main thing that your potential lenders will look towards. If you have a very strong credit score, getting a loan in your name can be not too difficult of a task.
Additional Benefits of a Good Credit Score
A strong credit score can also help you with a number of credit card companies. Credit card companies are more interested in having customers who will pay their bills on time, and so may offer those with strong scores better interest rates. That means more money for you in the long term.
Even if a company or money lender doesn’t offer you a better rate upfront, your strong credit score does give you some negotiating power. You can argue for a better rate and most lenders will probably listen and consider.
Even if you’re not planning on being a homeowner, your high credit score can also make your search for a place to live easier. A person with a high credit score will have a much easier time getting approved for an apartment or a rental just about anywhere.
A person with a bad credit score might get into some hot water with a landlord, especially if the bad credit score was a result of a previous eviction. On the other hand, a person with a strong credit score is kind of a landlord’s ideal tenant.
Living With a Strong Credit Score
There’s not much better than going through life with a strong credit score. What can you do with good credit? The above information should help you work through the many, many benefits.
Strong credit can make your life easier in numerous helpful ways.
Need help finding money even if you don’t have strong credit? Give us a call for assistance.
