There are a variety of benefits that come with having a good credit score that can affect many areas of your life. These can include your financial health, professional life, where you live, and much more. If you already have a good credit score, it is important to maintain it. If your credit score is less than perfect, the following information may offer just the right motivation to help you get started on the road to building a great credit score.
Favorable Interest Rates
The most obvious benefit of having a great credit score, is being able to qualify for low interest credit and loans. This means that if you make a purchase that requires financing, you will save on the amount you repay. Depending on how low the interest rate is, this can add up to thousands of dollars saved on interest charges when purchasing large items, such as a home or vehicle. A great credit score will also make it much easier to qualify for credit in general. A good credit score translates to more purchasing power.
Get Approved For Your Dream Rental Home
Searching for that perfect new home is a fun and exciting adventure, at least when you have good credit. Sadly, if your credit is less than perfect, you may have a difficult time getting approved for a rental home. Most property owners and property management companies will run your credit report to see if you are a good risk. If your credit score is poor, you will probably be declined and the property offered to another applicant with a better credit score.
Land Your Dream Job
Although having a great credit score will not get you a job by itself, having a bad credit score can keep you from being hired. Many employers now run a background and credit history on applicants. If your credit score is very poor, or you have a bankruptcy or delinquent accounts on your credit report, an employer may decide to offer the job to another applicant with a better credit history. Rather than having accounts become delinquent, using credit consolidation can help to reduce the number of monthly payments you have and lower your interest rates, allowing you to pay off your balances faster. It can also help you to avoid having accounts end up in collections.
Lower Insurance Premiums
Like many employers, the majority of insurance companies also use your credit score as part of their method when calculating your premium. Statistically, people with poor credit are more likely to file claims than those with high credit scores, so insurers typically charge those with poor credit higher premiums.
Avoid Costly Deposits
If you have an outstanding credit score, you can avoid paying high security deposits on items such as cell phone and utility service. Cell phone providers can charge as much as $800 in deposits if a person has a poor credit history. Utility providers may also charge deposits of up to $200 or more, depending on estimated usage and the extent of your negative credit history. By maintaining a good credit score, you can avoid these expensive and inconvenient deposits altogether!
Take Charge Of Your Debt
If you are struggling with debt and plan to finance a major purchase in the next 6 to 12 months, credit consolidation might be your best bet. Credit card balance transfers and credit card consolidation loans can help you reduce debt while avoiding damage to your credit score. You also gain several benefits: lower interest rates, reduced number of monthly payments, and most importantly, you will preserve your credit rating!