What is a good credit score? Why does it matter to you? When we are younger, the stakes are lower. You didn’t have to worry about a credit score because you weren’t planning on buying a home anytime soon. But, as you get older and want to land a dream job, get a mobile phone contract, or most importantly buy a home, your credit score is crucial. Below, we will explore why a good credit score matters and how you can fix your credit.
Why Do You Need a Good Credit Score?
A good credit score essentially gives you more choices. Homebuyers with the best credit can typically get the lowest mortgage interest rates. On the other hand, if you have poor credit, you are considered a subprime borrower. This label gives you fewer options and higher interest rates.
What is a good credit score? The answer to this can vary from lender to lender. Yet, good credit scores with the main credit reporting agencies tend to fall into the following ranges:
Equifax – 420 to 700
Experian – 880 to 999
Call Credit – 4 to 5
We encourage you to check your credit score about once a year to track your progress and to make sure there are no false debts that are hurting your score.
How to Repair Your Credit
Show You Are Stable – Prove to banks that you are able to effectively manage your finances by opening and paying for your internet contract, utilities, and other monthly payments on time.
Pay on Time – Your credit score will be seriously impacted if you receive any court judgements for debt. Therefore, seek debt advice if you find you are having issues keeping up with your payments.
Do Not Have Too Many Credit Cards – Potential lenders may see you as a high risk if you already have several open accounts with high credit limits. Improve your chances of securing a mortgage by closing the accounts you no longer use.
Don’t Move Around – When mortgage brokers see that you have lived in one spot for a significant time, they feel more comfortable. It also helps if you have kept a steady job.
Author: Estate Agent Networking UK
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