Your credit score is more than just a number. It plays a bigger role than most people realize. Your score can influence whether you get approved for a loan, the interest rate you’ll pay, and how much house, car, or financing you qualify for.
If your score is low, it’s not a dead end, but it could mean higher costs or delays on the things you want.
Here’s a closer look at how your credit score affects big purchases and what you can do to boost it fast.
Why Your Credit Score Matters
When you apply for a mortgage, car loan, or even some types of financing for appliances or furniture, lenders want to know if they can trust you to pay them back. Your credit score tells them how risky you are as a borrower.
Most scores range from 300 to 850. Here’s a simple breakdown:
- 800 and above: Excellent
- 740–799: Very good
- 670–739: Good
- 580–669: Fair
- Below 580: Poor
The higher your score, the more likely you are to get approved—and the better your interest rate will be.
The Impact on Big Purchases : Buying a Home
A good credit score is key when applying for a mortgage. With a high score, you’ll qualify for better loan terms and lower interest rates. Over 30 years, that can save you tens of thousands of dollars.
For example, someone with a score above 740 might get a rate near 6.5%. But someone with a score in the low 600s might pay closer to 8%—or not qualify at all.
Learn How to Create a ‘Big Purchase’ Budget that works, so you know exactly how much house you can afford without overextending yourself.
Buying a Car
Car dealerships also check your credit before offering a loan. A better score means a lower rate and a smaller monthly payment.
With poor credit, you may face high interest, be required to make a large down payment, or get stuck with a loan that has harsh terms.
Applying for Store or Appliance Financing
Many stores offer zero-interest deals on large purchases, like furniture or refrigerators. But those deals usually require decent credit. If your score is low, you may only qualify for high-interest plans—or get turned down completely.
What Makes Up Your Credit Score?
To raise your score fast, you need to understand what affects it. The five main factors are:
- Payment history (35%) – Do you pay on time?
- Credit usage (30%) – How much of your available credit are you using?
- Length of credit history (15%) – How long have your accounts been open?
- New credit (10%) – Have you applied for a lot of new credit recently?
- Credit mix (10%) – Do you have different types of credit, like loans and cards?
Some of these take time to improve. But others can be fixed in a matter of weeks.
Want to dive deeper into how each factor impacts your score? The CFPB offers clear resources to help you understand how credit scores are calculated.
How to Raise Your Credit Score Fast : Pay Down Credit Cards
The fastest way to raise your score is to lower your credit usage. If your cards are close to the limit, pay them down as much as you can.
Try to keep your total balance under 30% of your credit limit. Under 10% is even better.
Ask for a Credit Limit Increase
If you have a good history with a credit card company, you can ask for a higher credit limit. This helps lower your usage without making a payment.
Just make sure you don’t start charging more once you have the extra room.
Dispute Any Errors on Your Credit Report
Mistakes on your credit report can drag your score down unfairly. Get a free report from all three credit bureaus (Equifax, Experian, TransUnion) at AnnualCreditReport.com.
Look for:
- Wrong late payments
- Accounts that aren’t yours
- Balances that are too high
If you see a mistake, dispute it right away. Fixing even one error can raise your score quickly.
Pay Bills On Time—Every Time
Even one missed payment can hurt your score. Set reminders or use automatic payments to stay on track.
If you’ve missed payments in the past, focus on building a steady streak. The longer you go without a late payment, the more your score will recover.
Keep Old Accounts Open
It might seem smart to close unused credit cards, but that can hurt your score by shortening your credit history and lowering your available credit.
If you don’t have an annual fee, leave those old accounts open and use them for small purchases once in a while.
Your credit score plays a big role in your financial life—especially when it’s time to make a big purchase. A low score can cost you thousands over time. A high score can save you money, time, and stress.
The good news? Your score isn’t fixed. With the right steps, you can start improving it today and set yourself up for better deals down the road. Make smart moves now, and your future self will thank you.
