If you want to save thousands over the life of a loan, today’s blog is just for you. Welcome to Day 5 of March Money Moves: Elevate Your Credit in 30 Days! Today, we’re sharing the importance of setting a credit score goal and how it can impact the interest rates you receive on mortgages, car loans, and other credit products.
Why Your Credit Score Goal Matters
Your credit score is a key factor lenders use to determine your interest rate and loan approval terms. A higher credit score can mean lower interest rates, while a lower score could cost you thousands in extra payments over time.
For example, let’s say you’re applying for a $250,000 mortgage:
- Credit Score: 620 → Interest Rate: 7.5% → Monthly Payment: $1,748
- Credit Score: 760 → Interest Rate: 6.0% → Monthly Payment: $1,499
That’s a $249/month difference or $89,640 in savings over a 30-year loan! Setting a credit score goal helps you qualify for the best possible rates, making homeownership and borrowing more affordable.
Choosing Your Credit Score Goal
So, what should your credit score goal be? Here’s a breakdown of FICO Score Ranges: ✔️ Excellent (760-850): Best rates on mortgages & loans
✔️ Good (700-759): Competitive rates
✔️ Fair (650-699): Higher rates, but loan approval still possible
✔️ Poor (600-649): Limited loan options, high interest rates
✔️ Very Poor (Below 600): May struggle to get approved
If you’re aiming for a mortgage or auto loan, try to get your score to at least 740 or higher. If your score is in the 600s, even a 20-40 point increase could save you thousands over time!
5 Steps to Improve Your Credit Score
Once you set your goal, it’s time to take action! Here are five steps to help you boost your credit score:
1. Check Your Credit Report for Errors
- Get a free credit report from AnnualCreditReport.com and review it for mistakes.
- Dispute any inaccuracies that could be lowering your score.
2. Pay Your Bills On Time
- Your payment history makes up 35% of your FICO score.
- Set up auto-pay or calendar reminders to never miss a due date.
3. Reduce Your Credit Utilization
- Keep your credit card balances below 30% of your total credit limit.
- Example: If you have a $5,000 limit, try to keep your balance below $1,500.
4. Pay Down Debt Strategically
- Use the snowball method (smallest balance first) or avalanche method (highest interest first).
- Paying down revolving credit boosts your score faster than paying off installment loans.
5. Avoid Unnecessary Hard Inquiries
- Each hard inquiry can lower your score by a few points.
- Only apply for new credit when necessary.
Track Your Progress & Stay Motivated
Once you’ve set a goal, track your progress: Use free credit score monitoring services like Credit Karma, Experian, or your bank’s credit tools.
📝 Keep a credit journal to document improvements.
🎯 Set mini-milestones (Example: Raise score by 20 points in 3 months).
Setting a credit score goal is the first step toward financial freedom and lower loan costs. By committing to small changes, you can see big results over time.
What’s your credit score goal for 2025? Drop a comment below and let’s support each other on this journey! Stay tuned for Day 6, where we’ll discuss credit reporting agencies and what you need to know!
FTC Disclaimer: This is not a sponsored video or article. All opinions are genuinely my own. This post also contains affiliate links and I earn a small commission if you make a purchase after clicking on my links. It does not cost you any extra. Thank you for your continued support to keep the Bri Callis Blog going!
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