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Why is credit repair important?
Fico scores affects every area of life. When your credit is bad, your life may face similar hardships in the areas of:
- Interest rates. Interest rates depend heavily on your credit score. If you have a history of late payments, collections, bankruptcy, etc., the result may equal higher interest rates. If you improve your credit score you’re likely to see a reduction in interest, which can result in saving money over time.
- Loan applications. Lenders rely on credit to recommend new customers. When your credit is low, your borrowing power is Largely affected. In our current economy, mortgage and auto lenders tend to tighten their restrictions when it comes to drafting new loans. Many times more is required of the average borrower, including a substantial down-payment and a credit score of 720 or higher. If your credit score is low, it could create problems when applying for a new loan.
- Insurance premiums. Insurance is the business side of risk mitigation, so it makes sense that a clean credit report many times results in better rates. Insurance providers look at your financial track record to help determine your risk levels in other areas of life. A low credit score is often viewed as a high-risk customer.
- Employment opportunities. Many employers now require credit checks for new applicants. The job market is very competitive, and managers use this protocol to measure a new-hire’s level of responsibility. Despite your qualifications, a bad credit report is likely to make you seem unreliable and careless—two qualities that should never appear on your resume.
- Savings. Favorable loan terms, interest rates, insurance premiums, and employment all add up to one sum: savings. A good credit score means better options. The less money you spend on high-interest rates and premiums, the more you’ll have to save for emergencies, retirement, and education.