Why Building My Credit Score is Important
Did you know that your credit report and score reveal your spending habits and your ability to pay for them? You can learn a lot about your personal financial history just by having a look at your credit report. This really matters if you are thinking about applying for a loan or a new credit card. Lenders typically peek at your credit report and credit score to decide how risky you are. If they consider you too risky, they might deny your application or charge you a higher interest rate. You can change that though and even improve your credit by taking command of the actions that affect your credit. Brightside can help you with that, here’s how:
- Go to the Brightside app and link your credit data with the Brightside Credit Score and Report Feature.
- You’ll be able to view your credit score and track it over time. While you’re there, get insights into what’s driving your score, and view your full credit report to identify possible errors. Brightside can help show you how to request that an error on your credit report be fixed for free.
- Contact your Brightside Financial Assistant (FA) and ask for help monitoring and improving your score, and fixing any errors you find.
Why are credit reports and scores important?
Credit reports and scores matter because they can affect:
- Loans and credit cards (getting approved and the interest rate you will pay)
- Insurance (getting approved and what you will pay)
- Access to rental housing or jobs in some cases
Once you and your Brightside FA put a personalized plan in place, there’s a simple way to remember the factors that are important to fixing or improving your credit. The BUILD acronym of advice for building good credit is a general rule of thumb to follow:
Be on time – always pay on time so nothing negative goes on your credit history.
Under 30% (use under 30% of your credit limits) – Keep your balances low compared to your limits (especially with credit cards).
Infrequent Applications – Only apply to two (or fewer) credit lenders per year.
Length matters – Keeping your oldest accounts open can help your credit score.
Diversify accounts – Have a mix of at least three open credit lines with more than six months’ activity.
As you fix, strengthen, or improve your credit score, it’s a good idea to review your credit report at least once a year. That way you can keep an eye out for any errors and celebrate your success once you see your score getting stronger!
Brightside Client Story
Chris came to Brightside while going through a divorce and needed help moving out of their home within a month. The biggest concern for Chris was the cost of living alone, given that he was used to a combined income with his ex-wife. Due to his poor credit score, lack of savings, and lack of confidence, Chris had no idea whether he would qualify for a new apartment. Plus, his hourly rate didn’t cover all of his expenses each month. He contacted his Brightside Financial Assistant for assistance.
How Brightside Helped
- Chris’s Financial Assistant, Jes, helped Chris understand how much income he would need to afford the additional expected costs associated with renting an apartment.
- Jes recommended apartments within Chris’ price range and helped Chris get approved for a $1,000 payroll deducted loan through a Brightside partner so he could make the payment and move into his own apartment.
- Chris and his FA came up with ways for him to manage his money by paying certain bills early. He was also set up with a Brightside Savings account that let him contribute directly from his paycheck, along with a Spending account to help manage his expenses.
- Jes helped Chris see that working available overtime at his current employer would enable him to save $350, allowing him to reach his goal of $1,000 by the end of the year.
- Chris was promoted at work for his hard work, and he has money saved for emergencies.
“I love this! I have struggled financially and it’s been a major goal of mine to increase my credit score and be financially comfortable.” – Brightside Client