Benefits of Having a Good Credit Score - Brink's Money
Benefits of Having a Good Credit Score
25 Aug 2022
Surely at some point you have heard of the importance of having good credit. Your credit score reflects your financial health. Having a good credit score is important for many life decisions like buying a car or taking out a mortgage. But are you aware of the unexpected benefits of having good credit? Read on for some benefits you may not have thought of:
Low Interest Rates on Credit Cards and Loans
When most people think about having a good credit score, they think about saving big time with low interest rates. An above average credit score will help you with your loans and credit cards. With a good score, you’re more likely to qualify for the best interest rate. Ultimately, the less you must pay towards your interest, the faster you can pay down your principal on your credit card balance and loans.
Better Car Insurance Rates
Having a good credit score really becomes a lifesaver when it comes to saving on car insurance rates. In most cases, insurance companies will run a credit check when you apply for coverage. In other words, insurance companies look at your score to decide whether you get approved and even how much to charge you every month. If you have a low credit score, you’re more likely to be penalized with higher insurance premiums but with a good score, you’ll find that you end up paying less.
Skip Utility Deposits
Perhaps one of the most surprising savings you can expect when having a good credit score is getting to skip out on utility deposits. Depending on the leasing office or property management, you may be asked for a utility deposit when moving in. These deposits can oftentimes be between $100 to $200 which can be frustrating if it’s an expense you weren’t counting on. If your credit score isn’t as great as it could be, you could face a deposit or a letter of guarantee, which means a family member or friend agrees to pay that bill if you fail to do so. If you do have a great credit score, then you can save big and avoid having to put down utility deposits.
Room to Negotiate
A good rule of thumb is that it’s always better to negotiate. When it comes to negotiating, companies tend to have less room for negotiation when you have a low credit score because of the specific requirements and procedures they need to follow. When you have a good score, you can ask for a better rate on credit cards and even loans. Your history of making payments on time and being responsible with your money is a great advantage in the negotiation process. Don’t forget to compare all the offers you have received based on your credit score.
Get a Cell Phone Without Making a Security Deposit
Like utility deposits, if you have a poor credit score and want to get a new cell phone, you might be required to put down a security deposit. A drawback of having a low score is that you may have to opt for a pay-as-you-go plan or making additional payments on your contract. A good score could spare you from some of the up-front costs associated with purchasing a new cell phone. You may even get the latest phone for a discounted price.
Easier Approval for Rental Homes and Apartments
Did you know having good credit can make it easier for you when you apply to rent an apartment? More and more landlords are using credit scores as part of the tenant application process. Also, a good credit score will increase your chances of getting approved because of your history of on-time payments.
Having a good credit score can open several doors for you and especially a few that you may not have considered. It’s an incredible accomplishment to see your healthy financial habits pay off in monumental ways. If you find that perhaps, your credit score is not where you want it to be, it is possible to improve. As a matter of fact, we also have tips on how to rebuild your credit. Read more about that here.
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