The importance of having a good credit score (and the dangers if you don’t)

A recent study by the personal finance website NerdWallet reveals many millennials don’t fully understand the importance of having a good credit score.

“It’s a number that we at financial institutions use to identify your credit quality, the history you have for paying us back for your loans and debts, and the ability to repay so are we able to offer you financing options,” explained Summerset Lovett, Bank of Hawaii personal banking manager.

Your score is based on things like payment history on credit cards and other loans, the amount you may owe on a particular loan, as well as how long you’ve had credit.

A score can generally range from 300 all the way up to 850. Lovett considers a good score to be anything above 700.

She says many, especially young people, aren’t aware of how your credit history can impact your life.

“They think oh, it’s for me to buy a home or car, but ultimately, it could be how I get employed or can I find a place to live, and that could all be affected by ‘I didn’t pay a credit card back in college’ or ‘I was late on a number of payments’ so really just being aware,” Lovett said.

Landlords and even some employers do credit checks.

Scammers are also lurking, promising those with bad credit that they can magically erase negative information on your report for an upfront fee.

On top of that, you risk having your identity stolen if your personal information gets in the wrong hands.

“Credit can’t be built the next day. It’s got to be built and improved over time so there isn’t going to be a quick fix, so you really have to be aware that if it sounds too good, it probably is,” Lovett said.

If you’re looking to improve your score, Lovett says it’s not too late.

“Even if we pay the minimum payment, just whatever it takes $25 or $50 a month, pay that back on time, that’s going to be very important,” Lovett said.

If you have a consumer concern or are interested in becoming an Action Line volunteer, give us a call at 591-0222 weekdays between 11 a.m. and 1 p.m. or send an email to

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