Significant savings on interest rates on big-ticket loans – When you take a large loan to finance a big purchase like a home or car, even a small difference in the interest rate can translate into thousands of dollars over the lifetime of a loan. Borrowers with the highest credit scores are generally able to secure the lowest interest rates available at a given time for a mortgage or auto loan. And that can mean big bucks. For example, a 30-year fixed mortgage of $250,000 at 5.5% will cost a borrower a total of $511,010 over the lifetime of the loan. If that same borrower can get a 4.5% interest rate—just one percentage point lower—they will pay $456,017 over the life of the loan, a difference of $54,993.

So what’s a good credit score?
While there are countless credit scoring models on the market, one of the most commonly used is the FICO Score model, which places scores in a range between 300 and 850. FICO breaks up these scores into the following credit scoring bands:

Exceptional: 800 and above
Very good: 740-799
Good: 670 to 739
Poor: 579 and below

In most cases a score of 700 or more in the FICO model is considered in most lenders eye.

So how can I improves my credit score? While each consumer likely has dozens, if not hundreds, of credit scores, the good news is that what makes scores go up or down across different models is almost always the same. It’s just that different models may apply different weights to certain factors. There is no secret sauce to getting good credit scores. Generally speaking, the best way to improve your credit scores is to do the opposite of what caused them to go down in the first place, and give yourself enough time for them to improve. While each scoring model gives different weight to the factors that affect your score, there are usually seven factors that go into determining your scores:

    • Payment history: This is typically one of the most important factors—roughly 30% to 35%—in determining your score in most scoring models. Late or missed payments bring your credit score down. Conversely, if you have a long history of paying your bills on time, your score will generally be higher. The most important thing you can do to boost your credit scores is to pay all your bills on time every month. If you establish a pattern of doing this over time, your scores will improve. You may want to setup automatic credit payments to help your score increase over time.
    • Credit utilization ratio: This is the amount of revolving credit you’re actively using compared with the amount of credit available to you, based on your credit card limits. The lower the ratio, the higher your credit score. Aim to keep your utilization ratio under 30% with a very strong credit profile, but for the best scores, you’ll want to keep it under 10%.
    • Number of accounts: Credit scoring models also look at how many credit accounts you have open and on how many you carry balances. It’s better to have more accounts that don’t have a balance than ones on which you do carry a balance.
    • Credit history: Most scoring models also look at how long you have actively used credit. They typically look at the average age of all your open accounts. The longer your credit history, the better it is for your score. You can’t do much about this one, other than let time do its thing.
    • Credit mix: Scoring models also take into account what types of credit you have, including installment loans and credit cards. To improve your credit score, aim for a good mix of different types of credit.
    • Hard inquiries: When you apply for a new credit card or another kind of loan, the lender will request your credit report. That is considered a “hard inquiry”—and too many can lower your score slightly. However, multiple inquiries of the same kind—if you’re shopping for a car loan, for example—during the same period are often treated as one inquiry. The impact of hard inquiries goes down the older the inquiries are.
    • Negative credit information: If your credit report has negative financial information, like a bankruptcy or collection account, that can negatively affect your credit score, as well.

High credit scores will afford you access to the most rewarding credit cards on the market, including those that offer the lowest interest rates and the best rewards, such as cash back offers, travel points, and other incentives. You are also more likely to qualify for an introductory 0% APR purchase and balance transfer offers, which can translate to significant savings over time. Other things like… insurance discounts on rates to get lower easier to pay premiums, the ability to have as many housing options  when shopping for a home. Many Americans are locked into a small amount of homes to choose from because of credit. Even rental properties require positivity, when it comes to choosing  you over the other applicant with a higher score the higher score shows more responsibility and less of a risk.

Credit can be confusing and sometimes can be a task balancing it, Credit Services of America can help you with all you credit and debt needs. We are offering FREE credit consultations, we will pull your credit won’t hurt your score and produce a plan specifically for you. Time flies, we are busy as parents, business owners, students, and at work, our credit counselors and services can alleviate that, call us to set up that FREE consultation we are here to help!

A Goal without a Plan is just a Wish. Give us a call TODAY at 844-FIX-URCR or click on the following link creditservicesofamerica.com to schedule your FREE consultation and create your personalize plan to achieve your credit and debt GOALS!
*Individual results may vary. Please call for details and to discuss your own individual situation.