• About
    • About The Healthy Voyager
    • Press
    • Work With Me
    • Disclosure and Privacy Policy
  • HVTV
    • The Healthy Voyager Travel Show
    • The Healthy Voyager’s Global Kitchen
    • The Healthy Voyager’s TV Guest Appearances
    • Healthy Voyager Radio
  • Recipes
    • Appetizers
    • Beverages
    • Breads
    • Breakfast
    • Desserts
    • Dressings & Sauces
    • Entrees
    • Holiday
    • Kid Approved
    • Sandwiches
    • Sides
    • Snacks
    • Soups & Salads
  • Travel
    • Africa
    • Arctic
    • Asia
    • Australia
    • Canada
    • Caribbean
    • Europe
    • Latin America
    • Middle East
    • Oceania
    • USA
  • Lifestyle
    • Eco Corner
    • Entertainment
    • Fashion & Beauty
    • Finance
    • Gifts
    • Healthy Voyager Approved
    • Holidays
    • Home
    • Product Reviews
  • Wellness
    • Fitness
    • Health & Beauty News
    • Mind + Body
    • Pets
    • Relationship Corner
    • Parenthood
    • Weight Loss
    • Women’s Health
  • Shop
    • Cookbook
    • Healthy Voyager Merchandise
    • Entrepreneurial and Business Coaching
    • Financial Coaching
    • Travel Industry Consulting
    • Restaurant, Bar and Food Service Consulting
    • Wellness Coaching
    • Travel Credit Card Referral Bonuses
    • E-Books
      • Travel Guides
        • Spain
        • France
        • Australia
      • Cookbooks
        • Winter Wonderland
        • Restaurant Appetizers
  • Contact
101K
58K
0
26K
2K
The Healthy Voyager
The Healthy Voyager
  • About
    • About The Healthy Voyager
    • Press
    • Work With Me
    • Disclosure and Privacy Policy
  • HVTV
    • The Healthy Voyager Travel Show
    • The Healthy Voyager’s Global Kitchen
    • The Healthy Voyager’s TV Guest Appearances
    • Healthy Voyager Radio
  • Recipes
    • Appetizers
    • Beverages
    • Breads
    • Breakfast
    • Desserts
    • Dressings & Sauces
    • Entrees
    • Holiday
    • Kid Approved
    • Sandwiches
    • Sides
    • Snacks
    • Soups & Salads
  • Travel
    • Africa
    • Arctic
    • Asia
    • Australia
    • Canada
    • Caribbean
    • Europe
    • Latin America
    • Middle East
    • Oceania
    • USA
  • Lifestyle
    • Eco Corner
    • Entertainment
    • Fashion & Beauty
    • Finance
    • Gifts
    • Healthy Voyager Approved
    • Holidays
    • Home
    • Product Reviews
  • Wellness
    • Fitness
    • Health & Beauty News
    • Mind + Body
    • Pets
    • Relationship Corner
    • Parenthood
    • Weight Loss
    • Women’s Health
  • Shop
    • Cookbook
    • Healthy Voyager Merchandise
    • Entrepreneurial and Business Coaching
    • Financial Coaching
    • Travel Industry Consulting
    • Restaurant, Bar and Food Service Consulting
    • Wellness Coaching
    • Travel Credit Card Referral Bonuses
    • E-Books
      • Travel Guides
        • Spain
        • France
        • Australia
      • Cookbooks
        • Winter Wonderland
        • Restaurant Appetizers
  • Contact
  • Finance
  • Lifestyle

Why Is A Credit Score So Important?

  • February 17, 2020
Total
0
Shares
0
0
0

travel credit cardsYou’ve probably heard the term “credit score” mentioned in a financial context, and maybe you’ve even used your credit score while applying for a loan, job, or mortgage. But have you ever wondered what a credit score means and why it’s so important? If you have, your curiosity stops now; read on and learn what your credit score says about you, and how institutions in the financial sector use your credit score to determine certain services and products.

What is a Credit Score?

A credit score is a value that represents your lending risk. The score is carefully calculated for each individual by credit bureaus. The formula for calculating credit scores considers several factors, which include, payment and borrowing history, financial accounts, owed amount, and loan history.

The classification of credit scores varies with the bureau processing the variables. Some bureaus use stellar systems to quantify credit scores, while others use numeric variables. The most generally accepted and commonly used classification style is the 300 to 850 numerical range. This method is used by major credit bureaus like FICO and VantageScore.

Under the 300 to 850 scoring system, the following distinctions are given to specific score ranges;

  • 720 to 850 – exceptional or excellent credit score
  • 740 to 799 – very good score
  • 670 to 739 – good credit score
  • 580 to 669 – fair or average credit score
  • 350 to 579 – poor credit score
  • Under 350 – no credit score (you have no credit history or haven’t established a credit account)

People with a score that’s above the good credit score threshold (670) are considered to have a low lending risk; they make most or all their loan payments on time and have no blemishes on their credit history. On the other end of the scale, anyone with a poor credit score (below 580) is considered a high lending risk and may have a history of poor loan repayments.

Sitting in the middle of the pack is the fair or average credit score zone. Individuals who fall in this zone are not very good at making loan repayments, but they are not as bad as those with poor credit scores.

What Effects Does a Credit Score Have?

There is definitely has to be a good reason for credit bureaus to go through all the trouble of collecting and analyzing people’s financial information to come up with their credit scores. Below are the ways that a credit score influences service and product deliveries in specific business sectors, and also how your credit score affects you.

Loans and Financial Services

The primary purpose of a credit score is to show your lending risk. In other words, how likely you are to pay off a loan on time. Before a bank or any other similar financial institution can give you a loan, they first review your credit score as one of the most important financial assessment. Your credit score can solely determine the loan terms, the loan amount, and whether the lender will even grant you the loan in the first place.

With a good-excellent credit score, you’ll probably get some favorable terms on your loans, such as an extended payment period, low interest, and no insurance or collateral. You’ll also get a favorably high loan limit. With an average score, you’ll have generic terms on your loan without too much wriggle room. With a poor score, you might not get the loan at all, and if you do, it will have several strings attached and will probably come with a high-interest rate.

Some financial institutions don’t care about the borrower’s credit score, but they often have restrictive loan products and high interests, most of them also require collateral to secure loans. These are usually short-term low-principle loans like payday loans.

Similarly, it is important to remember that in some cases, credit cards can affect your credit score. From the application process right through to your usage habits, payment history, and beyond, credit cards can play a significant role in how your credit scores are calculated. With this in mind, when applying for credit cards, it is sometimes best to choose personal finance companies like SoFi that conduct a soft credit pull, as this will not affect your credit score. Correspondingly, you can learn more about the relationship between credit scores and credit cards by taking a look at some of the useful resources on the SoFi website here: https://www.sofi.com/credit-card/

Insurance Terms and Premiums

Most insurance companies also consider credit scores when determining their clients’ risk factors. A credit score is an important consideration, particularly in auto insurance and life insurance. With life insurance, however, it’s not the exact score that carries the most weight, but the information in your credit report can be used to determine certain terms of the life policy.

Auto insurers consider people with poor credit scores to have a higher risk than those with good scores. Individuals with poor credit scores are more likely to make auto insurance claims than their counterparts. So, ultimately, if you have a good score, you’re likely to get some good terms, discounts, and even lowered premiums of your car insurance policy.

Mortgages

Mortgages are treated more or less the same as long term loans. Although they are a bit different from regular loans, lenders still look at your credit score before deciding on the mortgage amount and terms. Similarly to loans, a high credit score earns you leniency with the lender, and you might end up getting the full amount you ask for, low interest, no mortgage insurance, and a flexible payment schedule.

Job Application

Nowadays, due to competition in the labor market, employers are looking for new ways to scrutinize candidates for job openings. One of the filtering methods involves using credit scores to separate worth candidates from the rest. A good credit score might be just what guarantees you a shot at your dream job.

Rental or Lease Application

If you want to lease a house, apartment, or building, the landlord might use your credit score to determine whether you would make a “good tenant.” The landlord may want to make sure that you’d be able to pay rent or lease on the property or living space, and a credit score is, in most cases, a good judge of financial abilities. A landlord is in his/her legal right to choose tenants using whichever reasonable means necessary. So, it’s possible to be turned down for a property lease or rental due to a low credit score.

A credit score is more than just an indication or lending risk. It has become a method of judging character in both social and professional settings. Some people go as far as to distrust those with poor credit scores and regard them as irresponsible. Although such attitudes are often misplaced, it’s still a good effort to maintain a good credit score.

Related Posts:

  • Finance For You - What Should You Look For In A Lender
    Finance For You - What Should You Look For In A Lender
  • Financial Fitness doesn't have to be a Fairy Tale
    Financial Fitness doesn't have to be a Fairy Tale
  • Saving for a House vs Saving for a Holiday
    Saving for a House vs Saving for a Holiday
  • 5 Empowering Goals to Aim for in 2021
    5 Empowering Goals to Aim for in 2021
  • Too Much Credit Card Debt? 4 Ways to Pay It Off
    Too Much Credit Card Debt? 4 Ways to Pay It Off
  • Your Guide to Short Term Loans
    Your Guide to Short Term Loans
Total
0
Shares
Share 0
Tweet 0
Pin it 0
Tags
  • credit
  • finance
  • money
  • score
  • tips
Carolyn Scott-Hamilton

The Healthy Voyager, aka Carolyn Scott-Hamilton, is the creator and host of The Healthy Voyager web series, site, and overall brand. An award winning healthy, special diet and green living and travel expert, holistic nutritionist, plant based vegan chef, best-selling cookbook author, media spokesperson, sought after speaker, consultant and television personality, Carolyn Scott-Hamilton is a respected figure in the world of healthy lifestyle and travel as well as special diet cooking and nutrition. The Healthy Voyager aims to help people live well, one veggie at a time!

7 comments
  1. Kelly says:
    May 10, 2021 at 12:18 pm

    The credit rating reflects all activities associated with obtaining loans. Thus, it is possible to identify fraudsters who have taken out a loan for another person. See more savings accounts here.

  2. Kelly says:
    May 10, 2021 at 12:18 pm

    The credit rating reflects all activities associated with obtaining loans. Thus, it is possible to identify fraudsters who have taken out a loan for another person. See more savings accounts here https://mediaonemarketing.com.sg/top-savings-accounts-singapore/.

  3. Media One says:
    May 10, 2021 at 12:19 pm

    The credit rating reflects all activities associated with obtaining loans. Thus, it is possible to identify fraudsters who have taken out a loan for another person.

  4. Media One says:
    May 10, 2021 at 12:19 pm

    The credit rating reflects all activities associated with obtaining loans. Thus, it is possible to identify fraudsters who have taken out a loan for another person.

  5. Carol says:
    May 10, 2021 at 12:57 pm

    The credit rating reflects all activities associated with obtaining loans. Thus, it is possible to identify fraudsters who have taken out a loan for another person. see more savings accounts here – https://mediaonemarketing.com.sg/top-home-loan-providers-singapore/.

  6. Media One says:
    May 10, 2021 at 12:58 pm

    The credit rating reflects all activities associated with obtaining loans. Thus, it is possible to identify fraudsters who have taken out a loan for another person!

  7. Ada says:
    February 18, 2022 at 8:58 am

    Great tips, thank you! Actually there is a useful video like https://youtu.be/hkH5yPu18Rg which can tell you more about credit repair and improve your rating

Leave a Reply

Your email address will not be published. Required fields are marked *

Meet The Healthy Voyager
Carolyn Scott, The Healthy VoyagerHi! I'm Carolyn Scott-Hamilton. I'm a Latina holistic nutritionist, vegan chef, cookbook author, speaker, show host, consultant and healthy travel and lifestyle expert. From video web series and travel articles, to product reviews and healthy, vegan and gluten free recipes, you'll find lots of info for a happier, healthier and greener lifestyle! After all, Life is a voyage, live it well!
Follow The Healthy Voyager
Follow Us on FacebookFollow Us on TwitterFollow Us on InstagramFollow Us on PinterestFollow Us on YouTubeFollow Us on LinkedInFollow Us on About.meFollow Us on iTunesFollow Us on E-mailFollow Us on IMDbFollow Us on Amazon.comFollow Us on Snapchat
Subscribe to My Newsletter
Enter Your Email Address
For Email Marketing you can trust
Shop
Healthy Voyager TV
I’m so excited to debut my latest episode of The Healthy Voyager! Go back in time with me to beautiful Colonial Williamsburg and see what the entire region has to offer from a great food scene to adventure and everything in between in part 2 of a super sized episode! Special thanks to @visitwilliamsburg for the wonderful experience 💖 Enjoy! *Link to video in bio* #HvonTour #whereintheworldisthehealthyvoyager #travelshow #instatravel #instashare  #travelgram #travelzoo #wanderlust #instahub #topdeck #instagood #instago #travel #followme #ladiesgoneglobal #lonelyplanet #gltlove #skyscannerambassadors #femmetravel #gtl  #femaletravelcollective #travacs  #latinastravel #usa #williamsburg #virginia #history https://youtu.be/RD5BxrXR_yQ
There’s no denying that most ladies aren’t getting the rest they need these days. With juggling life, work, family and everything else going on, getting good, restorative rest may be a struggle for some. But with @TrueYou Rest & Recover, those nights are over! A nighttime formula with melatonin, l-theanine, and magnesium to relax your muscles, ease your nerves, and quiet your mind, this products support a balanced lifestyle, helping women put self-care first. The TrueYou brand is only available at @vitaminshoppe and https://vitaminshoppe.mvk.co/2foho along with a whole line of TrueYou products. #sponsored #TrueYou
If you’re planning a trip to the Florida Keys, be sure to spend a few days at the incomparable @bakerscayresort 💖From chillin on the beach to catch the famous sunsets to great onsite dining and more, there’s something for everyone at Baker’s Cay! *Link to post in bio* #HvonTour #whereintheworldisthehealthyvoyager #travelshow #instatravel #instashare  #travelgram #travelzoo #wanderlust #instahub #topdeck #instagood #instago #travel #followme #ladiesgoneglobal #lonelyplanet #gltlove #skyscannerambassadors #femmetravel #gtl  #femaletravelcollective #travacs  #latinastravel #usa #florida #keylargo #floridakeys
Gas prices got you down? More and more people are switching to electric and for good reason! Not only does it lessen the wallet punch at the pump, it’s much better for the environment! As you know, sustainability and eco-living is my jam as is adventure which is why I’m crushing hard on this new EV SUV. Enter @vinfastus ! VinFast electric vehicles offer next-generation technologies and offers perks like no other car on the market! Become a VinFirst Pioneer. Place a $200 refundable reservation on a VinFast EV before May 30th and receive a host of exclusive benefits designed to enhance your driving experience. Benefits like: An e-Voucher applied towards the future purchase of a VF 8 or VF 9, $3,000 USD e-Voucher with the selection of a VF 8, $5,000 USD e-Voucher with the selection of a VF 9, A VinFirst NFT membership that grants you premium access and VIP perks for future VinFast activations and events through your blockchain wallet, One free VinFast portable charger (upon purchase of vehicle), Free Advanced Driver-Assistance System (ADAS) and Smart Service package (upon purchase of vehicle), A free 7-day Vinpearl Resort vacation package for 4 in Vietnam (airfare not included; upon purchase of vehicle).
I’m so excited to debut my latest episode of The Healthy Voyager! Go back in time with me to beautiful Colonial Williamsburg and see what the entire region has to offer from a great food scene to adventure and everything in between in part 1 of a super sized episode! Special thanks to @visitwilliamsburg for the wonderful experience 💖 Enjoy! *Link to video in bio* #HvonTour #whereintheworldisthehealthyvoyager #travelshow #instatravel #instashare  #travelgram #travelzoo #wanderlust #instahub #topdeck #instagood #instago #travel #followme #ladiesgoneglobal #lonelyplanet #gltlove #skyscannerambassadors #femmetravel #gtl  #femaletravelcollective #travacs  #latinastravel #usa #williamsburg #virginia #history https://youtu.be/xVwM8DLTegg
#ad Spring is the perfect time of year to start or get back to a mind and body balance routine. Getting back outdoors in the sunshine is great for the soul, mind and body. And with this awesome collection of products, you can do that totally stress free! @treehut Strawberry Sugar Scrub, delicious plant based protein bars and cookies by @toneitup , @tenausa intimates pads for support when you need it most as well as @newskinproducts Scarfade. #MindNBodyBBxx #treehut #showertok #hygieneproducts #selfcare #showerroutine #toneitupxwalmart #toneitup #TENA #MyEvolvingBody @babbleboxxofficial https://healthyvoyager.com/spring-into-mind-and-body-self-care/
Facebook 101K Likes
Twitter 58K Followers
Instagram 0 Followers
Pinterest 26K Followers
YouTube 2K Subscribers
LinkedIn
Snapchat

Follow HealthyVoyager on Snapchat!

Copyright The Healthy Voyager 2022

Input your search keywords and press Enter.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish.Accept Read More
Privacy & Cookies Policy

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Non-necessary
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
SAVE & ACCEPT