Your credit score is something that follows you around throughout your adult life, which is why there’s so much emphasis on establishing a good score earlier in life. While it does play a part in helping you get the home or auto loan you want, your score will also affect your ability to get into an apartment or get hired for a job. In fact, few things in life aren’t impacted by your credit score.

How Does Your Credit Score Affect Your Finances?
While it is true that a poor credit score can adversely affect your ability to get a loan, you may still qualify with some traditional lenders. When you do qualify, it becomes even more important to check the fine print for the loan. You’ll find that, while the bank is offering you a loan, they’re doing so at a significantly higher rate of interest. The higher interest rate is intended to compensate them for lending to a higher-risk borrower. 

How Can You Build Credit?
If you haven’t established your credit profile or you’re recovering from bankruptcy, you may be wondering how you can earn a better score. You can take out a credit-builder loan or get a secured credit card. Both options are typically linked to a checking or savings account, allowing you to use the deposit as collateral. After a predetermined period of time, you can withdraw the money and qualify for traditional types of credit.

How Can You Maintain a Good Score?
Once you have established good credit, the trick is to maintain it over a long period of time. This can be done by making sure all of your monthly payments, including utility bills, are always submitted on time. Additionally, you should keep your debt to credit ratio low. This simply means making sure your available credit is higher than the amount that you have charged. If you have three credit cards with a total of $1,500 of available credit, you should never have more than $750 charged to those cards.

The greatest value of a credit score of 700 and up is in the money it will save you. Since you’ll qualify for lower insurance rates, better interest rates, and other money-saving opportunities, you’ll have more disposable cash. This means you’ll have more resources to finance your vacations, home improvement projects, and your retirement.