Benefits of Having Good Credit Score
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A good credit rating offers you more benefits than you might think. Here are 7 strong reasons why you should work to have a good credit score so that you can really enjoy the benefits it can offer.
Car Insurance Rates
One of the more interesting reasons why having a good credit score is important is the way it affects car insurance premium. At first, it may appear that credit score and car accidents have nothing in common. However, the statistics show that on average people with a low credit score tend to file more claims thank those with a higher credit score. While the connection between a bad credit score and filing higher claims may seem tenuous, part of the reason may be that people with good credit pay for minor accident damage out of pocket rather than with their insurance.
In addition, people with bad credit scores tend to miss insurance payments more often which in turn makes them a higher risk for insurance companies. It is the combination that pushes the monthly premiums up for those with bad credit scores.
Although car insurance with no credit check is often a wise choice to go with for those who maintained poor credit history, but this always helps to get a lower premium with good credit report.
Greater Chance for Loan & Credit Card Approval
Those who have good credit scores are rewarded by lenders with having a greater chance at landing the type of loan or credit card that they want. This is because a good credit score reflects the history of making payments on time which is what lenders want in their customers.
Lower Interest Rates on Loans & Credit Cards
Because you are less of a risk than those who have bad credit scores, you can enjoy lower interest rates which mean that you will pay less each month on your credit card and for your loans. Paying lower interest rates means that you keep more money in your pocket.
Approval for Higher Limits
Because your credit score shows that you are good at paying back your loans on time, you’ll be rewarded with the ability to get approved for higher limits depending on the lender. In most cases, lenders are more willing to approve borrowers who have demonstrated with their credit score the ability to pay off their loans or credit cards.
Easier Approval for Renting Property
If you are looking to rent a house or apartment, then having a good credit score will help. Landlords look at credit scores to see if the person has been evicted or left an outstanding rent balance. By keeping your credit score high, landlords are far more likely to approve of you when renting their property.
No Security Deposits
Security deposits on utilities for example can be from $100 to $200 for those with middling to poor credit which makes it all the more annoying when moving into a new home. However, those with a good credit score can often forego a security deposit as the utility company sees that you are worth the risk.
Greater Negotiating Power
Having a good credit score means you are in a stronger position to negotiate a lower interest rate for your loan or credit card. By citing your credit score, you are telling lenders that you are a good risk and in turn to get your business, they’ll often negotiate a lower interest rate to bring you in.