A good credit score versus. poor credit – iowa college access network – ican


Build A Good Credit Score

A favorable credit history can help you improve conditions and terms whenever you make an application for charge cards and loans. You’ll receive lower rates of interest, which helps you save money with time.

You are able to build and keep a good credit score by:

  • Keeping low balances and credit limits on cards. High outstanding debt and credit limits can impact your credit rating.
  • Not opening new charge card accounts you do not need.
  • Reestablishing your credit report if you have had issues before. Open new accounts, and employ them responsibly. Make certain you eliminate them promptly.
  • Using lengthy-held accounts. For those who have a recognised account showing a lengthy good reputation for on-time payments, ensure that it stays and employ it to keep a great score.
  • Preparing in advance. Accounts remain on your credit score for approximately seven years.

Avoid Poor Credit

You are able to damage your credit by:

  • Transporting high amounts of debt.
  • Making overdue payments.
  • Missing payments.
  • Having to pay just the minimum amount due on bills.
  • Mobile phones
  • Charge cards
  • Student education loans
  • Vehicle loans

A few of the effects of poor credit include:

  • No credit. It’s possible you will not be capable of getting any kind of loan, even at high rates of interest, in case your credit is actually poor.
  • Lack of job possibilities. Many employers operate a credit assessment before they hire employees.
  • Insufficient housing options. Many landlords will not allow you to sign a lease until they have checked your credit.
  • Greater rates of interest on charge cards and loans.
  • Greater insurance costs on vehicle, health, rental and home insurance.

Begin to see the difference rates of interest make on the vehicle loan.
(Information within this chart is believed and meant for illustrative purposes only.)

A Good Credit Score Average Credit Poor Credit
Amount Lent $15,000 $15,000 $15,000
Rate Of Interest 7.00% 12.00% 18.00%
Payment Per Month $297 $334 $381
Amount Spent $17,821 $20,020 $22,854

Resourse: http://icansucceed.org/en/studentsparents/college/money_management/understanding_credit/good_credit_versus_bad_credit/

ICAN: Iowa College Access Network "Paying for College"