Credit Scores More Important than Ever

Friday, July 10 at 10:30 AM
Category: Personal Finance

Many consumers have subprime credit scores. Here is what they need to know to raise them.

LOWELL, Ark. – More than half the nation’s consumers cannot qualify for credit or financing at prime lending rates because of subprime credit scores. (1)

Credit scores are the most crucial element in whether a consumer can qualify for a loan and if they will receive an affordable interest rate, but many consumers remain unaware of their score or how it can be improved. Credit scores of about 700 are generally considered to be a prime score, though it varies depending on the credit bureau. 

Arvest Bank understands this is the time of year when many people are looking to make a big purchase with a consumer loan, and the subsequent importance for consumers to both be aware of and understand credit scores. If a consumer’s credit score is not high enough, it might be beneficial to put off applying for the loan and focus on improving the score. 
 
Credit scores are more available than ever – many credit card companies offer them with monthly billing statements and there are a few legitimate websites dedicated to providing credit scores. Because a credit score affects a borrower’s ability to get a loan and the interest rate of that loan, it’s important to regularly pull credit reports to ensure the information is accurate, complete and up-to-date before applying for a loan, as well as safeguard against identity theft. (2) 

A credit score reflects a person’s history with credit, but there are many ways for a consumer to improve their overall financial picture. 

Some of those include:
- Pay your bills on time. Delinquent payments and having accounts turned over to collection agencies have a major negative impact on a credit score.
- Keep balances low on credit cards and other "revolving credit." A high amount of outstanding debt can lower your credit score.
- Apply for and open new credit accounts only as needed. Don’t open accounts just to have a better credit mix. It probably won’t improve your credit score.
- Pay off debt rather than moving it around. Also, don’t close unused cards as a short-term strategy to improve your credit score. Owing the same amount but having fewer open accounts may actually lower your credit score. (3) 

Arvest Bank believes it’s also important to know that these steps won’t necessarily rebuild someone’s credit score, but rather begin to change their credit history, which is then reflected by the credit score. 
 
Many banks now offer credit-monitoring services to checking account customers as a way of helping customers protect their identity and have access to helpful information about their credit history and score.
 
 
Tags: Credit History, Credit Score, Financial Education, Press Release
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