Technology for software and applications System Why is the credit score of your parents important?

Why is the credit score of your parents important?

The credit score that determines if you get a mortgage is a crucial part of your life, but not everyone has the money to pay off the loan, especially when they’re in a tough financial situation.

If your parents have a bad credit score, it can make it harder for them to get loans. 

Read More When you do have a good credit score in your parents name, your credit score is often more important than it used to be. 

A report released by Credit.com shows that for families with a credit score below 620, a mortgage in their name is worth about 1.3% more than a similar loan for a creditworthy family without a credit history.

A credit score above 620, however, is worth 1.2% more. 

The report states that there is a correlation between the score and the number of credit cards you have, so if your parents are getting a credit card, they are more likely to get it. 

There is no single factor that can make a mortgage more valuable than a good, healthy credit score.

But, with the right credit history, it is possible to score for a home loan that you can afford and even make a good down payment.

Read MoreA good credit history also makes it much harder to get a credit check from the credit reporting company, but it is still possible to improve your credit.

If you’re in the early stages of your credit, you can avoid a credit freeze and still get a free credit report. 

For those who are paying off their credit, a good score can also mean that they don’t have any debt in the first place, which can help them reduce their debt in an orderly manner.