October 15th is Get Smart About Credit Day as well as International Credit Union Day. A good credit score is important for your financial health. The Balance lists the following as six benefits to having a good credit score:
• Low interest rates on credit cards and loans
• Better car insurance rates
• Approval for higher limits
• Easier approval for renting
• Obtain certain contracts (like cell phone or utilities) with no security deposit
• Better negotiating power
Understanding your credit score is an important place to start. The following are tips for you and your family to help understand what affects your credit score. Help your children and grandchildren understand the importance of sound financial management. Learning healthy credit habits can be one of the most valuable lessons a young person can learn.
• Amount of debt – Paying off the amount you charge to your credit cards each month helps to improve this amount. Showing that you are reducing debt each month gradually increases your score over time.
• Age of credit history – An older credit history can show a trend toward reliable financial standing.
• Late payments – Any time you make a late payment, especially on a credit card or loan, it is reflected on your credit report. Pay early and pay on time.
• The number of hard inquiries for credit – If you are considering a loan for a car or house, each inquiry will be registered on your credit report. When your credit is in good standing, it doesn’t have a big impact.
• The number of accounts – Opening and closing accounts can have an impact on your credit score. Depending on the number of accounts, the impact on your score could be huge.
The holidays are rapidly approaching, be smart about what you use credit for. Budget and spend what you have to help reduce your credit spend and increase your credit score.
Contact a member of our Southcentral PA Team at 717.397.9600 with questions regarding your personal insurance needs. Click to get a quote.
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