I don’t have a credit score - what’s the big deal?

Well, it's a pretty big deal. And by that, we mean "big deal" in the financial sense. Having a credit score, and ideally a good one, is super important for many aspects of life in the United States. Let us run you through just some of the benefits you may be missing without a credit score.

Banks Don’t Trust Me...

At the end of the day, your credit score is a measure of how trustworthy you are from a financial point of view. As we said in a past article, your credit score is just a collection of your financial performance. Having a high credit score shows banks that you can be trusted. Not having one means banks will immediately turn a suspicious eye in your direction.

...And if They do, They Charge Me A High Rate!

Even if banks decide to loan you money even without a credit score, the Annual Percentage Rates (APR, the annual cost of your loan) on those loans will be exorbitant. Picture this: you want a loan of $100,000. The difference in total interest payment between a high and a low credit score is just under $14,000! Imagine not having a credit score at all! Having a high credit score makes you seem reliable, which therefore makes banks more willing to loan to you. The end result? A lower APR.

My Employers Check My Credit Score, Too?

Yes! They might, to see if you are reliable or not. Beyond them, your insurance company will also charge a higher premium if you do not have a credit score. That’s not it either: in order to have access to utilities such as water and electricity, you may have to pay a down payment if you do not have a credit score yet.

So I really should start building credit then…

We cannot stress this enough. Starting early allows you to build a strong credit score for when you will have to make bigger purchases such as a car or a house. With purchases like that, interest payments are going to be much, much bigger, and a few percentage point differences on your APR can make a huge difference.

To start building your credit score from the moment you land in the US, join ChrysCard’s waitlist! We can’t wait to help you on this amazing journey!

Sources: FICO


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