Image URL: Pixabay
It’s no news that once you start having kids, your life can get unpredictable.
Besides covering the cost of raising them, you also want to ensure that your kids have a good home, a promising future, and pretty much all they need to have a fulfilling life.
Incidentally, your credit score does play a huge role in that vision.
With that said, here are three things you should know about credit scores and why they matter;
Many Factors Determine Your Credit Score
Your credit score is a cumulation of many variables including your payment history, credit age, credit utilization, balances, recent credit, and available credit.
Your payment history is a record of how consistently or inconsistently you’ve made timely payments on your credit accounts, and it plays a huge part in determining your credit score.
That’s because it’s one of the most obvious ways to show lenders that you can pay back what you owe when it’s due.
Also, your credit age has a significant say in whether or not lenders are going to want to give you a chance. A long history of timely payments makes you even more trustworthy.
It signifies that you have experience with credit and that you’ve been consistent at handling it responsibly.
Experts will tell you that ideally, you should keep your credit card utilization at 30%. Even though charging all the money you can on your credit card might seem harmless, it can lower your credit score.
Altogether, you should pay attention to all these seemingly minute details. As a whole, your financial behaviors can make or break your credit score.
It’s Important to Monitor Your Credit Score
Most people only start monitoring their credit score when they need to make important financial decisions like paying for a new home or buying a major gift.
Unfortunately, that’s the point where some people discover that their financial health is in a vegetative state, which ultimately forces them to settle for unappealing loan terms or worse – an outright denial.
Between your career, kids, and personal relationships, it can be hard to find time to keep abreast of your credit information.
However, with the help of credit monitoring services like Sofi credit score monitoring, you can track your credit score for free.
Such services notify you of changes to your credit history within 24 hours. Also, you don’t have to worry that utilizing these services often will hurt your credit score. They only do a soft pull on your credit and it’s of no consequence.
Plus, if you notice suspicious activity or changes you didn’t make yourself, you can quickly take reasonable steps to address the situation.
You Can Improve Your Credit Score
Regardless of how bad your credit score is, you can always improve it. If you do what needs to be done, you’ll see changes and ultimately, they will translate to better interest rates and more spending power – allowing you to easily pay for things like vacations and other small luxuries.
To do that, you have to tweak your financial behaviors.
For starters, make sure there are multiple sources of income at your disposal. The reason for this is so you have more than enough money to pay your bills on time.
The next thing you should do is take a look at your credit report. By doing so, you’ll get a detailed overview of your credit status, including the areas you need to work on improving.
Slowly and steadily, you can tackle each area and build up your credit score.
