Sumary of Does Your Net Worth Impact Your Credit Score?:
- Your net worth is something you may not think about all the time.
- But you’re probably aware that the higher it is, the more financial stability you enjoy.
- Your net worth is measured as the total value of your assets minus your liabilities.
- Imagine you have $20,000 in savings and own a home worth $350,000. Let’s also assume you have a $5,000 personal loan to pay off and owe $200,000 on your mortgage.
- At that point, you’re looking at a net worth of $165,000.Seeing your net worth increase is something to be proud of, but will a higher net worth help your credit score?
- And as such, having a higher net worth won’t automatically result in a boost to your credit score.
- While having money in savings and owning a home might lead to a healthier financial picture for you, it won’t turn a credit score of 650 into a 750.In fact, it’s possible to have a high net worth but do a poor job of managing debt and bills.
- In theory, someone could have an impressive net worth and a lousy credit score.