Even though you may be able to survive without credit, it doesn’t mean that it’s necessarily comfortable. In order to get the most out of day to day living, it’s best to have a good credit score.
Your credit score is much more than just an arbitrary number that follows you around. Here are some of the many benefits that you can get from establishing a good credit score for yourself.
Higher Loan Approval Odds
If you’re looking for homes for sale, chances are that you don’t have enough cash laying around to pay for it. Most people require a loan to be able to pay for a house. Your chances will be much higher if you’ve got a good credit score.
If you’re looking at the big picture of being a homeowner one day, your credit score will be the biggest determining factor.
Lower Interest Rates
When you take out a loan or get a credit card, you pay interest on the money that you borrow. If you have a low credit score, you will have to pay a much higher interest rate. However, if you have a high credit score, you can qualify for a much lower interest rate resulting in significantly fewer finance charges.
Higher Credit Approval Odds
If you’ve got a great score, you will likely be approved for any loan or credit card that you apply for. While it doesn’t guarantee your chances 100%, it will undoubtedly increase your chances.
Increased Credit Limits
The amount that you’re approved to borrow will increase the higher that your credit score is. Since lenders can see that your credit score is favorable, they’ll be willing to let you borrow more money.
Even though they still make their decision based on your income as well, they still want to see that you’ve got an excellent reputation for paying things back.
Better Car Insurance Rates
When shopping around for car insurance, many companies will use your credit score as a way to charge you more.
The lower that your credit score is, the more that you’ll get hit with higher premiums. However, you’ll notice that people with a better credit score have much more favorable rates.
Better Cell Phone Contract
A lot of cell phone carriers advertise low rates for new phones; however, many people find out the hard way that the good price only applies to customers with a good credit score.
If you have a lower credit score, you’ll need to pay a much higher initial payment on the phone cost. Whereas if you’ve got a high score, you’ll be able to walk away with a phone that’s cheaper and often even close to free.