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Why is it important to have good credit?



A good credit score can make borrowing easier and more affordable. It can also reduce the cost of insurance and make it easier to find an apartment. (iStock)

A good credit score is important. Many companies check your credit, from mortgage lenders to insurance companies to landlords. If your score is low, you may not be able to borrow money or live where you’d like. Or you may pay more for loans.

The good news is, there are steps you can take to monitor your credit score for free and to increase it if necessary. Your credit score can change quickly if you embrace responsible borrowing behavior and remove inaccurate information. It’s worth taking these steps due to the importance of good credit.

It’s important to know where your credit score is at in order to know what steps to take to improve it. You can visit Credible to check your credit score for free without negatively impacting it.


Why is having a good credit score important?

A good credit score is important for five key reasons

  1. Having good credit gives you a choice of borrowing options
  2. A good credit score makes borrowing cheaper
  3. Landlords check your credit score
  4. Your credit score affects insurance rates
  5. Employers check your credit score

You may have fewer borrowing options with poor credit. For example, refinancing private student loans might not be possible since refinance lenders require good credit. Poor credit may also prevent you from getting the best rewards cards or a good rate on a personal loan.

A low credit score won’t just leave you with fewer borrowing options. While loans for bad credit are sometimes available, lenders will typically charge a higher interest rate for it. For these reasons, one of your top financial goals should be to improve your credit scores.

Finally, insurance companies, employers and landlords also check your credit. You may be denied the chance to live in your chosen apartment. Or an employer may not offer you a job if you have a problematic credit history. Your insurance rates will typically also be higher.

What is a good credit score?

There are actually different types of credit scores, but FICO scores are the most common score used by many lenders. FICO scores range from 300 to 850, with higher scores representing better credit and lower scores showing bad credit.

A score of 300 to 579 would be considered very poor; while scores between 580 and 669 are fair. Good scores are between 670 and 739, while very good scores range from 740 to 799. Finally, scores above 800 are classified as excellent credit.

You can visit Credible to check your credit score for free to see if you have bad credit, excellent credit or somewhere in between.

Is it important to watch my credit score consistently?

Keeping tabs on your credit is important.

By monitoring your credit, you can see how your financial decisions, such as paying down your personal loan, improving your payment history or lowering your credit utilization, are affecting your credit. You can also make sure no one has applied for unauthorized credit in your name and can confirm there are no mistakes on your credit report.

It’s a good idea to check your score at least once every few months, if not more often. You can visit Credible to learn more about credit monitoring and find out how best to keep track of changes in your credit history.


How can I quickly raise my credit score?

If your credit score isn’t as high as you’d like it to be, you have options for improving your credit. In fact, making a few smart financial moves could help improve your credit scores quickly. The moves that rank highest when it comes to affecting your credit include:

  • Repaying debt: The credit utilization ratio is one of the key determining factors in your score and a major factor to focus on when it comes to credit repair. It’s determined based on the amount of available credit used. If you repay some of your debt, you’ll reduce your ratio because you’ll be using less of your available credit — and your score should go up.
  • Becoming an authorized user: When someone adds you as an authorized user to a credit card with a long, positive payment history, the credit card history shows up on your credit report and improves your own credit record.
  • Using Experian Boost: Credible’s marketing partner, Experian, offers a tool called Experian Boost that allows you to connect your bank accounts to your credit record. This enables data on utility payments and payments to streaming services to be considered in determining your credit score. It can increase your score if you don’t have a long history of positive credit payments.


Since good credit is very important for so many reasons, it’s worth considering financial goals that boost your credit score and, if necessary, include credit repair. You can visit Credible today to sign up for credit monitoring or to see how your score impacts your insurance rates or affects your ability to qualify for loans such as student loans or personal loans.

Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.

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How Does a Secured Credit Card Work? | Credit Card News & Advice



Building credit from scratch is often referred to as a chicken-or-the-egg problem. If you don’t have a credit history, it can be challenging to get approved for a credit card. But if you don’t have a credit card, it’s hard to build a credit history.

Here’s where secured credit cards can save the day. It’s possible to be turned down for a secured credit card, but if you’re approved for one, it’s a good way to get started on your journey to great credit.

We’ll start with the basics and work our way up to the advantages – and disadvantages – of secured credit cards.

There are both unsecured and secured credit cards. An unsecured credit card doesn’t require a deposit to get approved for the card. The top unsecured credit cards from major issuers are typically used by those who have at least fair credit. There are some unsecured credit cards available for those with zero or bad credit, but they tend to have high interest rates and fees.

Due to the cost of unsecured cards that target those with little or bad credit, many turn to secured credit cards. Secured credit cards do require a deposit, usually ranging from $200 to several thousand dollars, depending on the deposit requirements of the issuer.

The deposit stays in an account, and the purpose of the deposit is to decrease the risk for the lender. If you don’t pay for the purchases you made with your secured credit card, the financial institution will use your deposit to pay it off.

When you get approved for a secured credit card, you’ll receive a credit card that looks just like an unsecured credit card. There’s no visible clue that the card is secured.

The amount of your security deposit is usually equal to the credit limit for your new secured card. You’ll use your secured credit card just like you would an unsecured card. You can use it for purchases everywhere that accepts your secured credit card.

Just to be clear, your security deposit stays in an account with the issuer. You’ll make payments on your balance from one of your own bank accounts. So, you’re actually buying things on credit.

Most secured credit card issuers report your payment history to the three major credit bureaus: Equifax, TransUnion and Experian. If you can’t find confirmation on the card’s home page that payment history is reported, call the issuer to make sure it’s the policy.

When your secured card’s bill comes, you must pay the bill by the due date. If you pay your balance in full, you’ll avoid paying compound interest. If you consistently make on-time payments and keep low balances on your card during the month, your credit score will begin to increase.

Secured credit cards have many advantages, but there are also downsides to this type of credit card.

  • Secured credit cards help you build credit and develop a good credit score.
  • Secured cards help you learn how credit works. And since the credit limits are on the low side, it helps to minimize your risk of getting into debt.
  • Some credit card issuers will promote you to an unsecured credit card. Not all secured card issuers have unsecured versions, but many of them do.
  • When you’ve built a good credit history and you’re ready to upgrade to an unsecured card, you can get a refund of your deposit.
  • Many secured credit cards offer rewards and benefits.

  • You have to make a security deposit, and this ties up your money for the life of the secured card.
  • Some secured cards have many fees, so you have to read the fine print carefully.
  • You’ll probably have a low credit limit, but this is often a good thing while you’re getting comfortable using credit.
  • Some secured credit card issuers don’t offer unsecured versions, which means you have to apply for an unsecured card from another issuer.

I know it’s difficult to build credit or to come back from a poor credit score. A secured credit card can be a great option, but be sure you read all the disclosure statements and understand if there are fees involved. After about a year of responsible use, you’ll probably have at least a fair FICO score (580-669), which is good enough to make the leap to an unsecured credit card.

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Review: Bank of America® Customized Cash Rewards Credit Card for Students



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Now that most students are starting to return to in-person school, many young adults and their parents are once again looking for the right credit card. Having a credit card offers students a secure and convenient method of payment. It also helps students build credit and even earn some rewards. The Bank of America® Customized Cash Rewards Credit Card for Students excels at all of these tasks.

Key Terms

  • Welcome Bonus: Earn $200 cash rewards after spending $1,000 within 90 days of account opening.
  • Rewards: Earn 3% cash back in the category of your choice including gas, online shopping, dining, travel, drug stores, or home improvement/furnishings. Receive 2% cash back at grocery stores and wholesale clubs and 1% cash back on all other purchases.
  • Annual Fee: None
  • APR: 13.99% to 23.99%
  • Promotional Financing Offer: 15 months of 0% APR on both new purchases and balance transfers.

How This Card Works

This card is a very competitive rewards card, especially for a student card. New applicants earn $200 in cash back after making $1,000 worth of new purchases within 90 days of account opening. You also earn 3% cash back in the category of your choice including gas, online shopping, dining, travel, drug stores, or home improvement/furnishings. Additionally, you earn 2% cash back at grocery stores and wholesale clubs and 1% cash back on all other purchases.

But rewards shouldn’t be the most important thing to students. Instead, consider this card because it’s very easy for Bank of America customers to manage, along with their checking and savings accounts. It also helps students to build their credit by offering them a free FICO score each month. It’s compatible with digital wallet technology and can be managed by a full featured mobile app.

New accounts also receive 15 months of 0% APR financing on both new purchases and balance transfers, and there’s no annual fee for this card.


While most student credit cards are very basic, this one comes with generous rewards, including a new account bonus. Other advantages are its promotional financing offer and free monthly FICO score. There’s no annual fee for this card, but that’s expected with a product designed for students.