Increasing your credit score is one method of saving money that you might be ignoring, especially when consumer costs continue to rise as a result of increased inflation.
A recent analysis by LendingTree suggests that you might save $22,263 throughout your credit and loan history if you raise your credit score from medium (580 to 669) to excellent (740 to 799). With $16,677, mortgages account for the largest share of those savings.
According to the 4 typical debt types (automatic loans, credit cards, debts, and private loans), LendingTree predicts that consumers stand to gain an additional $92 each month overall.
The entire anticipated savings have decreased from the $49,472 that LendingTree estimated in 2022 because of shifts in the interest rate landscape. However, there is still a benefit for customers with high credit scores.
“There aren’t many things in life more costly than bad credit,” stated Matt Schulz, head credit analyst at LendingTree.
Based on Schulz, raising your credit score can result in lifetime savings of tens of thousands of dollars due to reduced fees, interest rates, and additional loan terms.
When you think about other things you might do with the additional money, it’s a major issue, according to Schulz.
According to data from the final quarter of 2023, a significant number of people are depending on loans and credit cards for purchases, according to Bruce McClary, senior vice president at the National Foundation for Credit Counseling.
“A lot of individuals are still having difficulty maintaining with the cost of living at the moment,” McClary stated.
Your credit score is a tool used by potential lenders to assess your financial conduct, especially your likelihood of making timely loan repayments.
Usually, credit scores might be as low as 300 as well as high as 850.
As per Schulz, you are usually doing OK if you are above 700. However, he clarified that the greater your score is over 700, the higher off you are.