Having good credit definitely pays off. Below are some of the kudos that may surprise you.
Get lower interest rates on loans and credit cards.
Lenders consider people with great credit a good risk. If you’re applying for a mortgage, good credit may get you a wider range of mortgage offers. One or two percentage points in interest may save you tens of thousands of dollars over the life of the loan.
Leverage to negotiate lower credit card interest rates.
The higher your score, the more bargaining power you may have when negotiating interest rates. Why? Your credit card company does not want to lose your business and they will often lower your finance rate. Let them know of additional offers from their competitors based on your score. It doesn’t hurt to ask!
Qualify for lines of credit and/or higher limits.
With a strong history of repaying your debt on time, banks may be willing to lend you more money and, if asked, may often increase your credit limit.
Get instant rental approval.
If you’re renting a home or apartment, a good credit score increases your chances of securing your ideal location. Landlords use credit scores to screen their tenants’ payment history, delinquencies and charge-offs.
Receive lower insurance rates.
According to many insurance companies, people with bad credit are more likely to file claims. A good score may lower your premium and lock you into a better rate.
Many employers will check the credit of their applicants. If you have good credit, you are seen as more responsible than applicants with lower credit scores.
Avoid security deposits.
Utilities and cell phone providers often require a security deposit when you sign up for service. With good credit, you may not have to pay a deposit to begin service, or in the case of utilities, transfer to another location.
Check back with us for our next article, How to Increase Your Credit Score and Good Financial Habits to Start Now!