Your Credit Score Affects Many Aspects of Your Life
Your credit score affects much more than your ability to qualify for a loan. Potential employers frequently review your credit for signs of financial distress or mismanagement. Your insurance company can gauge the risk they take to insure you based on your credit score. Some utility companies may require a deposit if you have poor credit history. Potential landlords will review your credit to determine if you are likely to pay your rent on time each month. Most financial institutions will not open a checking account for you without a credit inquiry. Your credit score is critical to your financial and personal success.
Your credit score is drawn from a percentage of five important factors.
It is equally important to have different types of credit. There are two kinds of credit, the first is installment credit. Once you have a solid credit score, you can apply for a secured installment loan such as an auto loan. Installment loans have a fixed number of payments, a set payment amount and maturity date. This type of credit demonstrates your ability to make consistent, fixed monthly payments.
The second kind of credit is called revolving credit. This credit does not have a fixed number of payments and is automatically renewed as debts are paid off. A credit card is a good example of a revolving credit account. With a good payment history, your credit score will continue to improve. A favorable credit score will earn you the best interest rates available, more options for loan products, and lower origination fees.
Your credit report is a good indicator of your financial well-being. Since it influences so many parts of your life, including your mortgage rates, credit card approvals, apartment requests, or even your job application, it’s wise to understand how credit reports work. O Bee recommends you review your credit report annually from each credit bureau (TransUnion, Equifax, and Experian) via the one-stop site annualcreditreport.com. Federal law allows you to get a free copy of your credit report every 12 months from each credit reporting company.
Our credit cards offer Rewards Points or Cash Back.
Looking for a first credit card or first auto loan? New borrowers have a choice of several options that will help you establish good credit.
O Bee members who work to improve their credit score may be rewarded with a lower interest rate on their credit card at O Bee.
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