It is very important to know about your credit ratings since it has a significant role in your financial life. You will get qualified for new credit or get a decent job based on your credit ratings.The creditors with whom you have different accounts will report your spending and payment habits to the credit bureaus. As per the information provided by the credit grantors, a numerical score will be created for you. Your score is called a FICO score and it has a significant effect on everything you do from buying a home to getting a cell phone.
Credit scores are considered like the grades for the grown ups and credit report is looked as a report card. Your credit ratings is said to be better if you have higher grades. Credit scores range from 300 to 850. A person having credit scores of more than 700 is considered to have good credit ratings.
If you have good credit scores, you will be able to get better deals on mortgage rates. Due to the recent economic recession and the foreclosures being on the up, most of the banks are paying close attention to a person’s FICO scores before granting any new home loan. You will save a lot of money just in interests if you have a good credit scores. For example, if you get a home loan of $200,000 at 2% APR, you will save around $100,000 in interests!
You will also get lower rates on insurance if you have good credit ratings. Most auto and health insurance companies will check your credit ratings before setting the premium on your insurance. Most of the people with high credit scores are statistically less likely to file a claim against their policy. The consumers are rewarded when they get lower rates on their life, health or auto insurance.
Good credit ratings have a deep effect on employment opportunities also. Most of the employers will review your credit report and go through the past account history. This is done to determine your ability to be responsible with money. People with good credit scores will be given more preferences than someone who has a bad credit..
Credit ratings have a significant effect on almost every area of your life. You will live a much better life if you have good credit ratings. It is crucial to monitor your credit because it changes over time and new information is always being added.
