Your credit score may simply seem like numbers on a page, but those digits can impact your life and finances in very big ways. A poor credit score will make it difficult for you to earn the trust of lenders, insurance companies and prospective employers, among others, whereas a positive score will have the opposite effect. Here are just a few of the many benefits of maintaining an attractive score:
Easy Access to Credit Cards and Loans
While they must be used cautiously, loans and credit cards can help you keep control of your monetary situation even during tough financial squeezes. In many cases, you can only qualify for loans or credit cards if your credit score is favorable. Other factors, including your current debt and income level, will also be assessed; however, having a high credit score in your corner will definitely increase your chances of receiving approval.
Better Deals on Cards and Loans
When a credit card or loan is attached to your name, high interest rates can lead to a financial nightmare. With that in mind, you should always shop for deals with the lowest interest rates. Loan lenders usually check the credit scores of consumers to assess their reliability – and thus, the chances of their defaulting on a loan. The same is true for credit card providers. So, if you can show them an impressive credit score, you may be rewarded with lower interest rates.
Employment Opportunities
Even potential employers can take a look at your credit score if they have your permission. Employers want honest and reliable workers, so while other factors such as your job experience and education will have an impact on your chances of landing a job, a high credit score may also help.
Better Deals With Utility Services
When you are looking to do business with a utility company, your credit score can either help or haunt you. With a poor credit score attached to your name, a utility company may take precautions and force you to pay a security deposit – sometimes ranging up to $200 or even $300. However, if you come bearing a high credit score, the utility company will see you as less of a risk and may allow you to forego the security deposit.
Optimal Car Insurance Policies
Even car insurance companies may request to see your credit score when you apply for a policy. Again, this is their way of weeding out unreliable individuals. If you have a poor credit score, expect to face higher premiums; if you have a shining credit score, expect to find better deals.
With all of these benefits in mind, aim to build and maintain the best credit score you can. Once you have a good score, it becomes easier to build and improve on those numbers. However, if you have a poor credit score, you will need to put in some extra effort to prove your reliability to everyone from loan lenders and potential employers to car insurance providers and utility companies.