Financial literacy and financial wellness are two critical factors to learn regarding finances. Education in both of these spaces plays an essential role in credit scores and creditworthiness.
According to The Hill, lawmakers share that people need financial literacy to improve their credit. The lawmakers also highlight that helping younger generations start financial literacy programs to maintain strong credit and become educated on critical financial topics will help their credit score and finances in the long run. Gen Z and other younger generations first need to understand how to manage their money.
Starting these younger generations out when they are in school for financial education can positively impact their creditworthiness. Many variables go into calculating what someone’s three-digit credit score is, such as big and small financial purchases. Types of purchases include buying large life milestone items, like a house, education, or a new car.
Credit scores and creditworthiness all matter in many different factors:
- Borrowing money affects interest rates, where thousands of dollars are paid in interest as time goes on
- Employers, landlords, and insurance agencies will check credit when they are deciding to hire someone, rent an apartment, or insure someone
Utilizing financial literacy to maintain good credit will be useful for the future. Spend what is possible to pay back promptly and don’t miss any late payments. Credit history can be affected up to seven years later if there are any late payments, so it’s essential to stay on top of your finances and become educated.
Become financially literate will have many benefits in the long run, including credit scores and creditworthiness, as these factors go hand-in-hand with one another.