Your credit score is calculated based on a number of factors and offers a snapshot of your creditworthiness. When you have a good credit score, it can help you to be approved for better rates on loan products. However, there are other benefits of having a good credit score that you may not be aware of.
It’s Easier to Buy a Home
When you feel you’re ready to buy a home, you want to know you’ll be approved for a mortgage and that you’ll be able to get good terms including an affordable interest rate. Having a good credit score is one of the first steps toward opening the door to the best mortgage opportunities. If you’re already a homeowner, a good credit score can also make it possible for you to take out a home equity loan or refinance your current mortgage.
Save Money with Low-Interest Rates on Loans
Not only does a good credit score make it more likely you’ll get approved for loans, but it can also help you to get the lowest possible interest rates. Being approved for low-interest rates can save a lot of money over the life of a loan.
Discounts on Car Insurance
You might not think about your credit score when you apply for car insurance, but keep in mind that insurance is a financial product. Insurance agents may check your credit before giving you a policy, and you may be entitled to discounts if you have a good credit score.
Get a Better Phone Plan
If you don’t have good credit, you may find that cell phone companies may not want to offer you a contract, and if they do, they may require a large deposit. With good credit, you may not have to give them a security deposit and you may be offered a discounted price on a phone purchase.
Secure the Best Credit Cards
Credit card companies offer many different perks to attract the best customers. These may include zero percent interest for a period of time, cashback rewards, and other bonuses. To secure the best deals, you’ll need a good credit score.
More Options for Renters
Your credit score can still affect you even if you don’t plan to buy a house in the near future. Credit scores may be used by potential landlords as part of their screening process, and some landlords may not consider tenants who have had credit problems. A good credit score gives you a chance to choose the apartment or house that you’d like to rent without being rejected for bad credit.
Is Your Credit Score Correct?
Your credit score can only be right if the information on your credit report is right, and this information is too important to leave to chance. Check your credit report periodically to make sure there isn’t inaccurate information on it that might be bringing down your score. Errors on credit reports can include accounts showing past due that were never past due, wrong balances, and even accounts that don’t belong to you.