Why is My Credit Score Important?

Need a refersher on credit scores? Check out our previous post: “What is a credit score?

Credit scores can be confusing to understand and difficult to optimize: mixing account types, balancing credit utilization, improving payment history, and understanding technical terms. It’s easy to get overwhelmed. Instead, it can be helpful to start by understanding why credit scores exist and how your credit score can directly benefit you.

Why Does My Credit Score Matter?

Your credit score represents your character to lenders. By looking at your credit score, lenders can better assess your likelihood of defaulting on your loan.

Why exactly do lenders or other entities look at credit scores? To lenders, your credit score represents your character. By looking at your credit score, lenders can better assess the likelihood of defaulting on your loan. That is, whether you will pay the lenders back per the initial contract. In addition, if your credit score is relatively high, you may get better terms on your loan–like a lower interest rate.

What can a good credit score get me?

If your score falls in-between 670-850 you can qualify for some pretty sweet perks that can save you money!

Anything above a 670 is generally considered a good credit score. If your score falls between 670-850 you’ll likely qualify for more favorable terms and lower interest rates. A higher credit score increases your likelihood of approval for new credit cards, loans, apartments, and even higher limits on your credit card. You also get more negotiating power to make loan terms more in your favor. These are just a short list of examples of all the doors that are opened with a good credit score. Credit is a gift that keeps on giving; treat it right so it will treat you right.

Build your credit for free when you sign up for Kikoff today!

The information provided in this blog post is meant for informational purposes only and does not constitute financial advice. Kikoff Inc. is a financial technology company and not a bank. The Kikoff Secured Credit Card is issued by Coastal Community Bank, Member FDIC. Terms and conditions apply & individual results may vary. Make consistent on-time payments to maximize credit building potential.  Credit factors outside Kikoff, like other account balances or delinquencies, can have an impact on credit building progress.  Subject to approval via identity verifications and subject to terms and conditions. Kikoff Credit Account reported line of credit intended exclusively for credit building purposes & can be used to finance the purchase of monthly Credit Service plans and/or digital educational material via the Kikoff Store. For more information, visit our Terms and Conditions and Privacy Policy. We report to the major credit bureaus: Equifax, Experian, and TransUnion. Features, tradelines, bureau reporting, & pricing may vary depending on plan purchased. This post may contain marketing messages and advertisements in compliance with the CAN-SPAM Act. Please refer to our Secured Card and Credit Account Terms for detailed product disclaimers.

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Credit utilization, or the amount of credit used, greatly impacts your score—keeping it below 30% is ideal. Avoid myths like carrying balances to build credit faster. Pay in full and focus on strategies like the Snowball or Avalanche methods to manage debt effectively and improve financial health.