September 1, 2020Why a Good Credit Score Matters

You’ve heard by now, more than once, that it is important to have a good credit score. While this sounds good and wise, the importance of a high credit score often doesn’t sink in until you see it in black and white. 

We want you to understand that a good credit score matters in very real ways. The following example will help illustrate the difference your credit score makes for how much you pay for loans, such as financing a vehicle. 

The Effect of a Good Credit Score  

Before we begin, it is important to note that each lender will have their own tiers for deciding what constitutes a good or bad score they usually are ranked this way: 

  • A+ 719 
  • A 690-719 
  • B 660-689 
  • C 630-659 
  • D 600-629 
  • E < 600 

But how does this translate to dollars and cents? Imagine a scenario in which you finance a new $25,000 car for 60 months (5 years). The interest rate can more than quadruple as a credit score moves from the highest credit tier to the lowest. This means that a member with an E rating could have to car payment of about $120 than a member with an A+ rating—that’s nearly $7200 more total interest paid for the life of the loan! 

PEFCU Mobile Banking App’s FICO Score Feature 

Now you can see just how much your credit score comes into play when borrowing money. As a PEFCU member, you can check your credit score anytime on the PEFCU Mobile Banking app’s FICO Score featureMonitoring your credit score with the FICO score feature helps you take control of your creditworthiness by giving you the tools you need to make changes that can boost your credit rating. 

Boosting Your Credit Score 

A credit score is one of the most important numbers for all adults today. Not only does it determine how much interest you pay on loans for things like cars and homes, but it also determines if you can get approved for apartments, some jobs, and more. Here are a few tips to help improve your current score: 

  1. Pay all loans and bills on time.
  2. Always pay more than the minimum balance on credit cards if you can’t pay the full balance.
  3. Consolidate debt if you have a large volume of high-interest credit cards or short-term loans. Balance transfers may help with that.
  4. Don’t use more than 25of your credit card limit. 

When you’re diligent about these small steps, it can have a tremendous impact on your credit score.

 

 We’re Here to Help! 

It may feel a bit unfair to be penalized by a lack of a favorable credit score. However, one positive to consider is that it serves as incentives for you to work on continually increasing your credit score. The key is to start now. We’ll be happy to show you how specific tools, such as auto-payments, debt consolidation, and the FICO Score feature can help you boost your score and simplify your finances.  

To learn more, stop by any branch location or give us a call at (800) 226-6673. 

 

Each individual’s financial situation is unique, and readers are encouraged to contact the Credit Union when seeking financial advice on the products and services discussed. This article is for educational purposes only; the authors assume no legal responsibility for the completeness or accuracy of the contents.  

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Why a Good Credit Score Matters

You’ve heard by now, more than once, that it is important to have a good credit score. While this sounds good and wise, the importance of a high credit score often doesn’t sink in until you see it in black and white. 

We want you to understand that a good credit score matters in very real ways. The following example will help illustrate the difference your credit score makes for how much you pay for loans, such as financing a vehicle. 

The Effect of a Good Credit Score  

Before we begin, it is important to note that each lender will have their own tiers for deciding what constitutes a good or bad score they usually are ranked this way: 

  • A+ 719 
  • A 690-719 
  • B 660-689 
  • C 630-659 
  • D 600-629 
  • E < 600 

But how does this translate to dollars and cents? Imagine a scenario in which you finance a new $25,000 car for 60 months (5 years). The interest rate can more than quadruple as a credit score moves from the highest credit tier to the lowest. This means that a member with an E rating could have to car payment of about $120 than a member with an A+ rating—that’s nearly $7200 more total interest paid for the life of the loan! 

PEFCU Mobile Banking App’s FICO Score Feature 

Now you can see just how much your credit score comes into play when borrowing money. As a PEFCU member, you can check your credit score anytime on the PEFCU Mobile Banking app’s FICO Score featureMonitoring your credit score with the FICO score feature helps you take control of your creditworthiness by giving you the tools you need to make changes that can boost your credit rating. 

Boosting Your Credit Score 

A credit score is one of the most important numbers for all adults today. Not only does it determine how much interest you pay on loans for things like cars and homes, but it also determines if you can get approved for apartments, some jobs, and more. Here are a few tips to help improve your current score: 

  1. Pay all loans and bills on time.
  2. Always pay more than the minimum balance on credit cards if you can’t pay the full balance.
  3. Consolidate debt if you have a large volume of high-interest credit cards or short-term loans. Balance transfers may help with that.
  4. Don’t use more than 25of your credit card limit. 

When you’re diligent about these small steps, it can have a tremendous impact on your credit score.

 

 We’re Here to Help! 

It may feel a bit unfair to be penalized by a lack of a favorable credit score. However, one positive to consider is that it serves as incentives for you to work on continually increasing your credit score. The key is to start now. We’ll be happy to show you how specific tools, such as auto-payments, debt consolidation, and the FICO Score feature can help you boost your score and simplify your finances.  

To learn more, stop by any branch location or give us a call at (800) 226-6673. 

 

Each individual’s financial situation is unique, and readers are encouraged to contact the Credit Union when seeking financial advice on the products and services discussed. This article is for educational purposes only; the authors assume no legal responsibility for the completeness or accuracy of the contents.  

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