By now, you probably know that a high credit score is better than a low one, but do you know all the reasons that’s true? A good credit score and solid credit history can have a positive impact on many facets of your life. If you’re not there yet, don’t worry! You can improve your score over time. For reference, a “good” credit score is generally considered to range from the mid-600s to mid-700s. Here are several benefits of a good credit score.
Easier to Get a Loan
Maintaining a good credit score shows that you use credit responsibly. When banks or other lenders see this, it lets them know that you are a good credit risk and more likely to pay back the money you’re asking them to loan to you.
Lower Interest Rates on Loans
You know when you see those commercials offering 0% or extremely low financing? Those impressive rates are reserved for customers with equally impressive credit. If you want to keep your interest rates low, keep your credit score high.
Easier to Rent an Apartment
Apartments routinely check credit scores for the same reason lenders do. They want to make sure that if they allow you to live there, you’re going to pay the rent in full, on time, every month. A good credit score offers them peace of mind that you are more likely to do that.
Improved Chance of Getting a Job
While prospective employers can’t view your credit score, they can see a version of your credit report that includes payment history. Employers look at it from a responsibility standpoint. They think if you use credit responsibly, pay your bills on time and aren’t overextended, you are probably more likely to be a responsible employee, too.
No (or low) Security Deposits
You probably love your cell phone and enjoy electricity and running water, right? A good credit score means you will be able to get all those things (and more) without having to put down a big chunk of money up-front as a security deposit. Utility companies and other service providers are happy to offer their services to customers who have a history of paying bills on time.
If you’re not sure of your current credit score or would like tips on how to improve your credit score, our free Credit Counseling can help.