FAYETTEVILLE, N.C. — Your credit score matters more now than ever, according to local financial professional Alan Porter from Strategic Wealth Strategies out of Fayetteville.
What You Need To Know
Local financial professional Alan Porter from Strategic Wealth Strategies says your credit score matters more now than ever
Some groups, like the Mortgage Bankers Association, are tracking home loans on a 30-year mortgage at slightly below 8%, while others are tracking it higher than that.
Porter says one of the best ways to improve your credit score is to use less credit than what’s available to you
Some groups, like the Mortgage Bankers Association (MBA), are tracking home loans on a 30-year mortgage at slightly below 8%. MBA says it’s at 7.7%.
Others, however, are tracking it higher than that.
“Credit scores are being pulled for anyone applying for a mortgage, renting an apartment, opening a new credit card or getting a car loan, and having a good credit score can help you secure a better interest rate when borrowing money, which is important as federal interest rates remain high. Mortgage rates are over 8% right now,” Porter explained.
Porter says one of the best ways to improve your credit score is to use less credit than what’s available to you.
“The recommended ratio is to keep your spending under 30% of your overall credit limit. For example, if you have a $10,000 credit limit, try not to borrow more than $3,000. To achieve this, be disciplined to spend less than you earn. Never use a credit card as a substitute for cash,” Porter said.
Porter says there are several things to keep in mind when evaluating your credit score.
- Each credit agency has different criteria for determining what a good score is
- The industry standard is five categories: excellent, very good, good, fair and poor. If you fall between 670 and 739, that’s considered good.
- A score of 700 or higher will usually get you approved for most credit cards or low-interest loans, but you won’t have access to as many opportunities as someone with a score of 740 or above
Porter says making payments on time, avoiding using multiple accounts and keeping track of your credit report are just a few ways to help improve your credit score.
“Credit card companies constantly offer deals or rewards for opening a new card, but don’t be tempted if you don’t need the credit. Opening new credit cards can lower your score, and you don’t want to have an excessive amount of credit available to you. That puts you at a higher risk of racking up a lot of debt quickly,” Porter said.