Why You Should Restore Your Good Credit

"I don't need a credit now, why should I care about my credit score?" Many people tend to have this thinking, and they don't care if they are having bad rating until the day they really need to apply for a credit but find their options for good deals are limited. At this moment, they start to realize the important of having good credit rating, but it might be too late as rebuilding it needs time & efforts. That's why you should always maintain it at good level and if you have damaged it, you should take actions to restore it, starts from today, not the day you need it.

The credit score is a number that measures your credit worthiness, it determines whether or not you will be able to get a new credit card, a mortgage to buy your dream house, or in many cases, whether you will be able to rent an apartment or sometimes it becomes a determination factor on whether you can get a job. So, the number has a lot of bearing in your life, you should take your own responsibility to make sure that your score is where it should be. At any time, once you realize you have bad score, you should take immediate action to restore it.

How good is a good credit score? The average American has a number around 680, which is considered averagely good. However, you should try to maintain it at 720 and above, a score that enables you to enjoy better options when you need for a credit. If you found your rating is below 620, your options to get loans are very limited; the situation gets worse if it is below 600. However, don't despair because of the bad rating; instead, you should try to restore it and there are plenty of ways to do it, what is needed is your action to get started to work toward restoring a good credit.

Lenders heavily factor your credit rating into their approval decision for a loan application. The higher score you have, the easier it is for you to get credit with the desirable terms that can save you a significant amount on interest. For example, the monthly payment for a 30-year $200,000 mortgage could vary based on your credit score. If you have a score below average, you may only get a home loan with an interest rate at 10%, so your monthly payment would be $1755; but if you have good rating, you may find a better deal with interest rate at 7.5%, making your monthly payment to be $1398. You may be offered with the best interest rate, as low as 5% by the lenders if they find you have excellent credit score, making your monthly payment to be $1074. Do see a high score can mean big savings? You can save thousands annually by qualifying for low interest rate mortgage and loans. That's why you should restore a good credit.

Summary

The credit score has a lot of bearing in your life. Hence, if you have made mistakes that damage your credit score, you should always take immediate action to restore it.