4 Ways Your Credit Score Helps You Plan Your Finances Better

By | February 20, 2019

Your Credit Score is more than just a number; it can help you take charge of your finances. Find out how!

4 Ways Your Credit Score Helps You Plan Your Finances Better

If you think that Credit Score is just a buzzword, you couldn’t be more wrong! Here are four ways your Credit Score helps you plan your finances better:

Valuable Insights

To truly plan anything in life, you need to have a strong understanding of the matter at hand. When it comes to your finances, your credit report is a crucial document that can give you really insightful information to help you improve your portfolio. Once you understand the various elements that come together to form your score, you’ll be more financially aware of things.

Awareness Of Outstanding Amounts

Though we’re aware of how much credit we’ve borrowed, we can get carried away every now and then if we’re not reminded of how much debt is already on our heads. Checking your Credit Score often and reading your credit report will serve as a constant and accurate reminder of how much your overall outstanding balance is across all your loans and cards.

Optimal Timing Of Credit Applications

Facing Personal Loan or Credit Card application rejection can be upsetting. But when you’re well updated about your Credit Score, you can always plan to apply for credit when the chances of approval are high. The better your score, the more likely your application will be approved. If your score is low at the moment, then you can use the insights from your credit report and ramp it up to a desirable score soon.

Peace Of Mind

For any plan to be successful, your peace of mind and sense of calm are critical. If you wish for your financial plans to succeed, then it makes sense for you to stay abreast with what’s going on in your credit portfolio. If not anything, being clear of your present scenario will at least save you from the suspense of wondering how good or bad your situation is – thereby giving you peace of mind and a clear picture to plan out your financial roadmap.

Now that you know how a Credit Score can help you with your financial dreams, here’s a quick index to help you understand where you currently stand, assuming you’ve just checked your Credit Score.

  • 0-300 – Needs improvement
  • 300-600 – Decent, but can be improved further
  • 600-720 – Average Joe. Not bad, but not great either
  • 720-800 – You’re doing it right. Keep it up!
  • 800-900 – You’re a pro!

Should you find yourself somewhere on the top half of this table, fret not! Here are some quick things you can do to get your score on the fast lane to improvement:

Additional Reading: How Does Bankruptcy Affect Your Credit Score

Don’t Miss Any Payments

Each Credit Card bill or loan EMI payment you miss will just eat into your score, so just make sure you don’t forget about due dates. Pro tip: Set up payment reminders if you’re absent-minded or extremely busy. Of course, if you have automatic payments configured, you won’t need to worry about this issue at all.

Additional Reading: What Can Hurt Your Credit Score?

Diversify Your Portfolio

If you hold a variety of different loans and cards, lenders will deem you trustworthy and experienced as a user of credit, so plan your finances accordingly. It wouldn’t help a lot to get two successful Credit Cards when you can mix things up a little.

Don’t Apply For Credit Too Frequently

Why? Because every time you do, the lender will run a hard enquiry of your profile with the credit bureau. Now, while you can check your Credit Score as many times you wish on our site and not worry about anything, hard enquiries can hurt your score, so it just makes good financial sense to spread out your credit applications.

Additional Reading: Check Your Credit Score On The Go

Today, we’ve made it so easy for you to stay constantly updated with your Credit Score. You can even check it from your phone – all you have to do is download our Mobile App.

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