Credit scores are super freaking important and here's why

Getting my finances in order and thus improving my credit score allowed me to purchase my amazing new Subaru at an interest rate of 1.74%!

Getting my finances in order and thus improving my credit score allowed me to purchase my amazing new Subaru at an interest rate of 1.74%!

1.      It determines your interest rate on loans

Interest rate is basically just a nice way of saying how much you are going to have to pay in order to get a loan.  The worse your credit score is, the higher your interest rate will be and the more money you will pay out over the course of your loan.  For example, if you buy a $300K house with a 15 year mortgage using the current average mortgage rate (about 3.89%) you will pay $23,000 more over the course of your loan than someone with a 3.00% rate.  Imagine what you could do with $23,000.

 

2.     Your credit score is like your reputation

Like a bad reputation, it’s pretty hard to turn around a bad credit score so avoid damaging your score at all costs (no pun intended).

 

3.     People will judge you by your credit score 

This thing follows you around everywhere.  Whether it’s your job, your romantic partner, your landlord or your bank, all of these entities will judge your financial responsibility based on your credit score.