Did you make a New Year’s resolution to improve your finances? Creating smarter financial goals now can set you on a worry-free path for the year! To get started, you should begin saving more and improving your credit score to secure affordable loans and future major purchases. Read on to learn more about how a better credit score can help you.
How Does it Work?
Simply put, a credit score is a representation of your credit’s standing. Your score will typically range between 300 and 850, and the higher the number, the better. According to the Federal Reserve, your credit score is used by:
- Banks and credit unions when you apply for a loan.
- Landlords when you apply to rent a residence.
- Insurance companies to determine if you can afford coverage.
How Your Score Rises
A credit score can rise and dip for various reasons. If yours is low, then don’t worry because no score is permanent. Given time, you can work to increase it by:
- Paying off most or all of your debt.
- Paying your bills on time every month.
- Keeping your credit and loan balances low.
- Making multiple payments monthly.
How Your Score Dips
It’s important to know that there are a few things that can cause your score to fall:
- Filing for bankruptcy or a home foreclosure.
- Missing payments on bills. This can be seen by lenders as being financially irresponsible.
- Applying for a mortgage loan. This creates a temporary dip because a lender makes a credit score inquiry.
- Closing an older credit account. This shortens your credit history.
Improve Your Credit in Harlingen
Improve your credit score while getting the financial aid you need by paying off your debt and only getting loans or credit cards when you need them. Doing this over a long term will show lenders that you are financially stable.
Our credit union in Harlingen offers a variety of lending services:
- Consolidation loans which can help minimize the interest rate you pay over time.
- Credit cards to help new borrowers grow their credit by making payments on time.
- Auto loans for new and used vehicle purchases.