Your credit score is an integral part of your financial identity and footprint, so you should do your best to leave a good impression wherever you go. A good credit score can bring you many financial benefits and make various bureaucratic processes much easier. What are the exact benefits of keeping your credit score high? Let’s find out how exactly a good credit score can benefit your financial situation:
Save on insurance
Let’s start with the insurance benefits of good credit. In many cases, your insurance company will pull out your credit score when you apply for coverage. They can use the data to decide whether to consider you for application, whether to approve your coverage and how much to charge you. Your credit score can also be used as leverage to boost your premiums or dismiss your request for policy renewal. Why are insurers checking your credit? Well, your credit history can predict whether you will pay all your bills and when you will pay them (on time or with delays). No insurer wants to invest in someone who is not reliable.
Lower interest rates on loans
If you have a good credit score, you can benefit greatly from lower loan rates. With any type of loan you’re applying for (no matter if a mortgage or credit card), your lender will definitely check your credit card score to form your interest rates. In general, the best rates go to people with the highest credit scores, and vice versa. If you’re new to all this, it’s good to know that scores above 800 are considered exceptional, 740-799 are considered very good, and less than 580 are considered poor.
Easy approval of loans
Before you need to worry about loan rates, you need to get approved for a loan. Getting denied a loan can be utterly devastating and you can miss many opportunities due to a lack of funding. Loans help people pay for a house mortgage, family car, or education. Even things like repeated attempts to get financing can affect your ability to get loans, as well as affect rates, loan amounts, and payment terms. Luckily, you can invest in pay per inquiry removal that can increase your credit score and boost your chances of getting approved for financing. Pay per inquiry removal is not expensive yet it can provide great help in the future.
Larger loan and credit card limits
People with good credit scores are more likely to get approved for big loans or even jumbo loans (often necessary to take out a mortgage for house payments in certain high-demand areas). Plus, you can expect better credit card limits and unlock a variety of credit cards as well. Cards with the best rewards are usually reserved for people with pristine credit, and they can enjoy things like travel rewards for their vacations, cash-back rewards for their shopping sprees, etc. These are all great perks to have.
Easier rental approval
A good credit score is not necessary only for people who want loans for buying a house. Even if you’re happy with renting forever, you still want to have access to the best properties and landlords. Landlords often pull out candidates’ credit scores in order to choose the best one. Every landlord wants tenants who are most likely to make payments on time and respect all market demands. In case your credit score is not satisfactory, you can expect higher deposits, upfront payment demands, shorter-term leases, and even rejection for housing.
No security deposits
Here’s a surprising benefit of having a high credit score: it can affect the speed of getting your utilities turned on. People with excellent or very good credit scores usually get quick access to utilities without too much stress. On the other hand, people with lower credit scores, especially those with poor credit, might need to make a deposit first or even have a person with a higher credit score legally agree to pay your bills in can you can’t make the payments
Approval for jobs
Even some careers require you have a good credit score, especially jobs that have direct contact with money or security clearance. Employers want workers who are responsible, capable of handling money, resistant to bribery, etc.
As you can see, your credit score plays an important role in many of your life decisions. In case your credit score is not perfect, don’t hesitate to put conscious effort into fixing it in preparation for future insurance applications, real estate opportunities, and career options.