How Your Credit Score Impacts Future Financial Goals

When it comes to your credit score, report and history, it’s important to remain vigilant, address issues, spend wisely and make payments on time.  

Since your credit score is a reflection of your financial behaviors, your spending power is directly affected by your spending habits. A credit score also impacts your savings and future goals. Staying prompt with credit card payments and other debts will help to avoid a snowball of debt that may become unmanageable. And it will also help to maintain or improve your credit score over time.

Establishing good credit creates a world of opportunity and sets you up for a future of great financial decisions. Even if your credit isn’t great, the good news is that it isn’t the end of the world. The Fair Isaac Corporation takes into account all of your credit behaviors, both good and bad. You will have plenty of opportunities to improve your credit score.

Having good credit not only increases your chances of getting loans or having lower interest rates on loans, but it can also factor into your likelihood of getting a job, renting a vehicle or apartment, or purchasing mobile phone plans. Your credit score holds a lot of weight, but, believe it or not, it isn’t as scary as it looks. Here are a few ways to keep your credit in check.

Save Consistently

Although it may seem like common sense when talking about paying off debt and staying financially responsible, avoiding excessive spending will help alleviate some financial stress and buyer’s remorse. For example, if you’re trying to save for a home, experts suggest determining what you can afford to own based on your ability to put down 20 percent of a home’s cost. Although you don’t have to put 20 percent down, it will give you an idea of what is in reasonable spending range that won’t be a detriment to your current savings and credit score. Making a budget early on and keeping these goals in mind when making other financial decisions will help you to better attain future goals.

Purchase Insurance

If you plan to finance your home with a mortgage, you will likely be required to purchase homeowners insurance. Many lenders will also recommend flood insurance or earthquake insurance if you live in an area that is prone to either. This may also apply for renters insurance. These plans protect your investments and will cover damage, should any disasters happen that may affect your home or rental property. It’s important to remember disaster can strike at any time, being proactive will be rewarded in times of need.

Defend Your Accounts and Information

Protecting personal identification information, as well as keeping a close eye on your credit score and report, can help detect any suspicious activity associated with your information and might tip you off to cases of identity theft. If you were to ever fall victim, identity theft protection could help limit the damage. Cybercriminals can ruin your credit score by opening credit cards in your name or even filing fraudulent tax returns when they steal your personal information. All things that can hurt your chances of getting credit cards or loans in the future. Acting on the offense and disputing these errors early on can potentially save you a lot of hassle in the long-run.

Secure Internet Connected Devices

Similarly to protecting your personal information, it is essential to defend your devices to help reduce the risk of information loss or cybercrime. Using secure networks when online shopping, investing in virus protection, securely storing confidential files and performing updates on devices regularly are all digitally responsible behaviors. It may seem tedious, but the benefits of taking a little time to protect yourself and your information will outweigh the drawbacks.

 

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