A credit score measures the consumer’s creditworthiness and can have a huge impact on their ability to make major financial purchases, such as buying a car or a house.
Boston, MA (PRWEB) April 22, 2016
Many consumers may ignore the importance of their credit score. The truth however, is that this three digit number can have a significant impact on a consumer’s financial life. In an effort to emphasize its importance, national non-profit American Consumer Credit Counseling offers several reasons why credit scores are so vital.
“A consumer’s credit score is the most important number they should be paying attention to,” said Steve Trumble, President and CEO of American Consumer Credit Counseling, which is based in Newton, MA. “A credit score measures the consumer’s creditworthiness and can have a huge impact on their ability to make major financial purchases, such as buying a car or a house.”
The Fifth Annual National Credit Score Survey, sponsored by Consumer Federation of America and VantageScore Solutions, discovered that, although credit knowledge has improved, there are still serious gaps in consumers’ knowledge of its importance. In the survey, only 20 percent of respondents were aware that a low credit score can increase the finance charges by more than $5,000 on a $20,000 car note.
ACCC provides reasons consumers should care about their credit scores:
1. Buying a house – Buying a house usually means taking out a mortgage. The ability to take out a mortgage hinges upon your credit score. If you have a bad credit history, it is unlikely a bank will approve the loan.
2. Insurance – A consumer’s credit score has a direct impact on how much they will pay for insurance and is determined through what is called an insurance score which is similar to a credit score However, banned in some states like Massachusetts, insurance companies tend to view a person’s credit score to decide how much they will charge for both auto and home insurance. A credit score determines a consumer’s level of financial responsibility and in an insurer’s mind the more responsible a person the less expensive they are. Consumers with higher credit scores are charged lower premiums.
3. Interest rates – Although banks may agree to approve a loan for consumers with low credit scores, they are usually tagged with a higher interest rate compared to consumers with high credit scores.
4. Renting an apartment – Landlords have the ability to check a potential renter’s credit score. If the person has a low score it is extremely likely the landlord will deny the lease. Those with bad credit may be required to get a co-signer on the lease.
ACCC is a 501(c)3 organization that provides free credit counseling, bankruptcy counseling, and housing counseling to consumers nationwide in need of financial literacy education and money management. For more information, contact ACCC:
- For credit counseling, call 800-769-3571
- For bankruptcy counseling, call 866-826-6924
- For housing counseling, call 866-826-7180
- Or visit us online at ConsumerCredit.com
About American Consumer Credit Counseling
American Consumer Credit Counseling (ACCC) is a nonprofit credit counseling 501(c)(3) organization dedicated to empowering consumers to achieve financial management and debt relief through education, credit counseling, and debt management solutions. In order to help consumers reach their goal of debt relief, ACCC provides a range of free consumer personal finance resources on a variety of topics including budgeting, credit and debt management, student loans, youth and money, homeownership, identity theft, senior living and retirement. Consumers can use ACCC’s worksheets, videos, calculators, and blog articles to make the best possible decisions regarding their financial future. ACCC holds an A+ rating with the Better Business Bureau and is a member of the National Foundation for Credit Counseling® (NFCC®). For more information or to access free financial education resources, log on to ConsumerCredit.com or visit TalkingCentsBlog.com.