In our previous blog, we talked about the importance of retrieving our credit scores, and if you have done that you are now aware of what your credit looks like and where you stand credit-wise. Armed with this knowledge, you are better equipped to assess your numbers and move toward financial freedom.
If you have ever dealt with a bank, or any type of financial lender, you would have certainly been exposed to the term, ‘interest rate.’ But did you know that it’s your credit score that determines what type of interest rate you will receive? Yes, your credit score! When it comes to your financial freedom, I want you to remember, it’s all in the numbers.
According to Investopedia, credit scores are calculated based on your payment history, the number of accounts you have, and the amounts owed; and they can make a difference in being approved for a loan or declined.
Credit scores range from 300 to 850 and believe me when I say it really is all in the numbers. With a score of 300, you will probably not even get a loan and if you do, your interest rate will be astronomical, costing you many times more for repayment. With a score of 800+ you can very likely get a loan, and possibly one with zero interest. In a general sense, a score under 580 is considered poor credit; a score of 580 to 669 is a fair credit score; a good credit score ranges from 670 to 739; a very good credit score is between 740 and 799, and an exceptional credit score ranges from 800 to 850.
Before applying for a loan, do your homework, know your credit score and decide what interests rate you would be willing to pay. The beauty is, you are in control of getting the better rates once you know how you can control your numbers and get them to work for you, not against you.
Remember it’s all in the NUMBERS.