Building Credit and Why it Matters

a man confirming a credit card purchase through online banking

Ready to ace the financial game? Think of your credit score as the ultimate playbook. Whether you're starting from scratch or looking to enhance your credit, our guide will be your trusted companion. In this BLOG, we're cutting through the jargon, highlighting the perks of a strong credit score, and showing you the ropes of credit building at Academy Bank. No-nonsense, just practical tips to make your journey to financial success achievable. Let's dive in and make your credit story one for the books!

What is a Credit Score?

When you understand credit scores, it clears the way to make smarter financial decisions down the road. A credit score is like a financial snapshot drawn from your credit reports. As your credit report changes, so does this three-digit number, ranging between 300 and 850. Credit scores serve as a metric for lenders to predict your likelihood of repaying a loan on time.

Benefits of a Good Credit Score

Securing a good credit score isn’t just about bragging rights. It also opens the doors to positive financial opportunities. Here are some major benefits:

1. Lower Interest Rates:

Having a good credit score comes with a cool perk—lower interest rates on loans and credit cards. When lenders view your high credit score, they recognize you as a low-risk, trustworthy borrower. This means you get the green light for more favorable lending terms!

2. Better Terms on Insurance Premiums:

Discounts for adulting? Yes please! Some insurance companies factor in credit scores when setting premiums. Having a good credit score might just score you lower rates on auto, homeowners, or renters’ insurance. This essentially means that you’re getting a discount just for being financially responsible!

3. Increased Likelihood of Loan and Credit Card Approvals:

A solid credit score enhances your chances of securing approval for loans, credit cards, and various forms of credit. Lenders are more inclined to offer credit to folks who’ve shown they can handle their finances responsibly.

4. Streamlined Rental Approval:

When landlords and property management folks review rental applications, they might take a peek at your credit score. Having a stable credit score can boost your odds of snagging approval for that dream rental.

5. Increased Job Opportunities:

In some job fields, employers check credit scores during the hiring process (especially for positions handling finances). A good-to-excellent credit score can be viewed positively by potential employers, increasing your likelihood of getting hired.

What is a Good Credit Score?

Understanding the credit score spectrum can feel like deciphering a secret code, but we've got the key! The highest achievable credit score is 850, but here's the inside scoop: the difference between a "perfect" 850 and an “excellent” score is minimal when it comes to qualifying for rates and financial products. So, there's no need losing sleep while chasing that elusive 850, especially given the natural fluctuations in credit scores.

Lenders have their own standards, but here are the general benchmark categories:

  • 720 and above is excellent. With this score, you have the ability to access top-notch financial products.
  • 690 to 719 is good. You are a trustworthy borrower with a solid standing.
  • 630 to 689 is fair. Not the best, but not a red flag either.
  • 629 and below is bad credit. It’s time for a credit workout!

Building Your Credit Score at Academy Bank

Ready to level up your credit score game? Whether you’re kickstarting your credit journey or aiming for credit repair, the best choice is a secured credit card. Academy Bank’s Credit Builder Secured Visa® Credit Card is linked to a cash deposit, which minimizes your risk in case you default on a payment. Plus, making small purchases with this card and paying in full by the due date can effectively boost your credit score.

With this card, you’re still in the driver’s seat. You can set your own credit limit (ranging from $300 to $3,000) based on your deposit into the Credit Builder Savings account. Plus, take advantage of our automatic reporting to the three major credit bureaus, ensuring your credit building efforts don’t go unnoticed.

Highlights of Academy Bank’s Credit Builder include:

  • No annual fee
  • No application fee
  • No over-limit fee
  • Automatic reporting to the three major credit bureaus to help you build a credit history
  • Added security of EMV chip technology
  • Faster, more secure online transactions when you enroll in Visa® Secure Remote Commerce

Let's build a better credit history together!

Want to keep learning about credit building? Read How to Build Credit with Academy Bank Credit Builder, or check out these credit tips and resources in our Education page.

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Subject to credit approval. Transaction and Penalty fees apply.  Credit Builder Savings account required.  $5.00 quarterly fee charged to the Credit Builder Savings account if not enrolled in eStatements. Improved credit score is not guaranteed. Credit score is determined by credit reporting agencies based on multiple factors, but satisfactory performance on a credit card product can improve your credit score. Default on a credit card, including missed or late payments can damage your credit score. Once added, funds cannot be withdrawn from the Credit Builder Savings account and the Credit Builder credit card without closing the savings account and the credit card.