CLARITY CORNER
Frequently Asked Questions
Confusion is the biggest barrier to financial progress. Here, we answer the most common questions we hear about loans, credit, and more—all in plain, simple English.
Think of your credit score as your financial report card. It's a number between 300 and 850 that tells lenders how reliable you are at paying back money. A higher score makes it easier and cheaper to get approved for everything from a credit card and auto loan to a mortgage.
No! When you check your own score using a tool like ours, it's a 'soft inquiry' and has zero impact on your score. A 'hard inquiry' only happens when you officially apply for a new loan or credit card, and that can temporarily dip your score by a few points.
It's simple: a fixed-rate loan has an interest rate that is locked in for the entire life of the loan—your payment will never change. A variable-rate loan has an interest rate that can go up or down with the market, meaning your monthly payment could change over time.
A pre-approval is a letter from a lender stating how much money they are likely willing to lend you for a home. It's a crucial first step in the home-buying process because it shows sellers you are a serious, qualified buyer and gives you a clear budget.
A deductible is the amount of money you have to pay out-of-pocket for a covered claim before your insurance company starts paying. For example, if you have a $500 deductible on your auto insurance and you have an accident that costs $3,000, you pay the first $500, and your insurer pays the remaining $2,500.
It depends on the situation. Personal loans usually have lower interest rates, making them better for large, planned expenses you'll pay off over a few years. Credit cards are better for smaller, everyday purchases and for the rewards they might offer. We have a full guide that breaks this down!
