What is a Credit Score and Why is it your daddy?

Hey there, Yusheeka Gray here with DIY Credit. I want to talk to you about what your credit score really is and why it is your daddy. Okay? Now, you probably already know the basics of what a credit score is, but you might not know that what it's actually doing is telling your potential creditors or lenders the likelihood of you going delinquent on your account within a specific period of time. The higher your score is, the less risky you are. The lower the score, the more risky, and the more likely you are to go delinquent on your account. Now, based on that, lenders can actually determine whether or not to extend credit to you at all or they can determine how much of a premium you're going to have to pay. So let me give you an example of that. 

Jane and John both get approved for a $30,000 vehicle. Jane's credit score is a 580. John’s score is 700. Now, because Jane's score is so much lower, she's going to pay a much higher premium at an 18% interest rate.

John's is only going to be 3%. Plus she's going to have to put $2,000 down. Her monthly payment's going to be $711 per month, and within five years she'll have paid $47,000 total for that vehicle versus John. His monthly payment's only gonna be $539 with no down payment, and in five years he'll have paid $12,000 less than what she paid.

So you see the difference here, big difference. And this is why your credit score is your daddy, because it literally dictates and controls every essential element of your life like this. Not to mention the home you're going to rent or buy where and how much you're going to pay for it, the car you're going to drive, the business you're gonna start, the school you're gonna attend.

So all of these things are super important. I hope this makes good sense. Please like, share and subscribe to our YouTube channel and thank you so much for watching and bye.

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