How Healthy is Your Credit Score?
Jenny Sanford, AFC®
Just like a yearly check-up with your doctor, financial experts advise people to check their credit reports once a year. Neighbors Financial Empowerment counselors work with you to access your report and score, as well as provide counseling to build healthy credit.
A healthy score allows you to borrow at lower interest rates, get discounts on your insurance premiums, and secure housing through favorable mortgages or leases. Credit scores are fluid and can change for the better or worse over time.
Hard times are harder with poor credit. We’ve all had the experience of a hectic morning of getting ready for the day and getting into a vehicle and just hearing a “click” when turning the key. If you’re a couple of days away from payday, no money in a savings account and no paid time off. The need to find a solution fast becomes challenging.
If a repair to the vehicle is not possible or unaffordable, you might look for ways to finance a vehicle so that you can maintain employment. No credit history, a poor credit score or not being established with a traditional bank leads might lead you to sign up for a title loan with company. Rates as high as 23% for 60 months for borrowed money to purchase a used vehicle!
Establishing credit and having a healthy score will allow you to access more favorable rates to borrow money when needed. Each time a creditor reports favorable repayments of borrowed money, it has a positive impact on your report. Overtime, this can lead to a healthy score.
If the thought of opening a credit card is unappealing, consider a FAIR Credit Building Account through Neighbors. With this account, you will borrow $500 and it will be placed in a Certificate of Deposit (CD) Account. For each month you will make payments on this account and it will be reported to the credit bureaus. At the end of 18 months you will have made all of your payments and the $500 is yours (minus interest and fees).
If you are curious about your score or want to build your credit, reach out to the Neighbors Financial Empowerment team to set up an appointment at 651-455-5000.