When it comes to your finances, there’s one number you need to continually keep score. It’s your credit score, of course, not your grades in school or your phone number. This one important number you can’t ignore unless you want your finances to go haywire. Before that happens, which plenty of consumers in the UK have to deal with, here are some reasons to convince why your credit score is more important than your bank account or GPA or any number for that matter:
1. Your credit score determines cost of future purchases.
When your credit score is good, you’ll be able to enjoy advantages such as lower interest rates on loan products and better deals on your insurance. Conversely, a poor credit rating means your future purchases will be more expensive.
2. Your credit score takes times to build.
If you’re a fresh graduate with little to no credit history, you’ll have to start from the bottom in order to have a good credit score. You’ll have to open new accounts such as credit cards and you’ll have to prove to credit agencies and financial firms that you have what it takes to be a responsible consumer. This may take months or even years to do that.
3. But your credit score takes even longer time to rebuild.
If building a credit score from scratch takes time, rebuilding it because you bungled up yours with late payments, massive debt and financial mistakes takes even longer time. You’ll need years, a ton of handwork and complete commitment to improving your credit scores in order for it to work. Rather than go through the complications and consequences of a bad credit score, might as well make sure your score always stays on the good side of things.
4. Your credit score can affect where you live.
Whether you’re renting or buying a home, your credit score plays an important role in this basic and major need. A poor credit score, for example, can affect your rental choices. Landlords, after all, want tenants with a reliable payment history. If you’re looking for a mortgage loan, it will be harder to find a deal where you’ll get approve for. If you do find a suitable mortgage loan, expect for your interest rates to be more expensive than customers with good credit.