Why You Should Improve Your 500 Credit Score
Many people are unaware of the ranges that a credit score can fall into, and in what ways that score can affect them. Some people may get a credit score check, simply glance at their score, and continue to do the exact same things that they used to do. A 500 credit score is obviously not the worst score that one can achieve, but one should still put a ton of effort into increasing that score so that they will be able to reap the benefits from a better credit score. This article is designed to show you the many reasons to attempt to increase your 500 credit score; there are literally hundreds of reasons regarding why you should do this, but this article lists only the most popular and effective of the bunch. Follow the guidelines that are set throughout this article, and you will have no problems in fully understanding why you should improve your credit score.
Where Does A 500 Credit Score Fall On The Scale?
In order to understand the true value of your credit score, it is only proper to compare it to other figures within the credit score scale. It is notable to compare this credit score to the lowest, highest, and average credit scores within the same scale; 0 is the lowest possible credit score, 850 is the highest possible credit score, and 620 is the average credit score in most urban areas. With this being said, one can see that a 500 credit score is higher than the lowest, lower than the highest, and significantly lower than the average credit scores. The average person (with the average credit score) only gets approved for a secured loan that is valued at 3 to 4 times their annual income; moreover, can you imagine how much of a loan you would be approved for with a 500 credit score? Unfortunately, the sad fact of the matter is that it would be a great struggle to get approved for any loan amount if you had a 500 credit score; however, don't lose hope just yet, there are ways to improve upon that score.
A 500 Credit Score Is Easy To Improve
It turns out that a 500 credit score is extremely easy to improve upon; this amazing fact can be attributed to the way that the credit scores are calculated and maintained. Credit scores can be thought of as being similar to averages; you must continue to get high marks in order to maintain a high average, and lower averages are extremely easy to raise with a simple few high marks. For instance, if you had a 500 credit score, and did the same things that somebody with a 700 credit score did, your score would increase significantly. However, if that person with a 700 credit score went about doing their regular business, their score would not increase nearly as much as the individual with the 500 credit score, if it even increased at all. This ease of increase should serve as one's motivation to improve upon their score so that they can too reap the benefits of having a higher credit score.
There Are Benefits Of Improving A 500 Credit Score
One of the main reasons of trying to improve upon a 500 credit score is that there are a ton of benefits that go hand-in-hand with having a significantly higher credit score. This article will not go in depth, but only touch up on some of the many benefits. For one, people with higher credit scores get better approvals, and better interest rates on investment and loan accounts. For instance, an individual with a 500 credit score may get the standard 3% interest rate on an investment account and a pre-approval for a $5,000 loan; however, if the same person had a 700 credit score they could easily get the preferred 3.5% interest rate on that same investment account and a pre-approval for a $10,000 loan! The amazing thing about improving upon a 500 credit score is that the benefits and features that are associated with an improved credit score will allow you to improve it even further; better rates mean more money, which means more bill payments, which ultimately means a higher credit score. If worked on vigorously, improving upon a 500 credit score could send the individual into a positive cycle that will continually improve their credit score over and over again!
Having a 500 credit score is not the worst thing that one can encounter; however, one should surely address the idea of improving upon that score. This article does not explain in detail the ways to improve upon the score that you have received, but merely the reasons that you should do so; ways for improving your credit score can be seen in the article entitled Improving Your Credit Score Made Easy. Whether it is for your own peace of mind, or for the many benefits that are associated with improved credit scores, you should always be in an understanding of the reasons that you should go about improving your 500 credit score! Utilize these reasons to your advantage, and understand the importance of increasing your credit score.