5 Little-Known Perks of Having a High Credit Score

Good credit offers a lot more benefits than just lower interest rates.

Personal finance advice talks a lot about the importance of a high credit score, and you probably already know some of its benefits. It helps you qualify for lower interest rates on any type of loan, including mortgages. It could also help you get approved for the best credit cards that aren't available to consumers with lower scores.

But what if you're not planning to borrow money, and credit cards aren't a big deal to you? There are still several ways your credit can affect your everyday life that many people don't know about. Here are the little-known perks a high credit score brings you.

1. It's easier to rent a home

A credit check is a standard part of the rental process. Most property management companies do it, and even if you're renting a place directly from the homeowner, there's a good chance they'll want to check your credit.

Some landlords deny applicants who don't meet their minimum credit score requirements, especially if they have other prospective renters to choose from. Or, they may require a larger security deposit. With a high credit score, you'll have a much easier time getting approved for a rental without paying extra upfront.

2. You could get cheaper auto and homeowners insurance

Although it's a controversial practice, insurance companies can use credit scores to help set premiums in most states. There are currently only three states that ban the use of credit scores in setting insurance rates: California, Hawaii, and Massachusetts.

Everywhere else, your credit history is fair game for insurance companies. It can make a huge difference, too. In Motley Fool Money's research on the average car insurance rates, drivers with excellent credit paid an average of $1,846 per year for car insurance. Drivers with poor credit paid over twice as much, $3,955, on average.

3. You don't need to pay deposits for utilities

Your credit could even affect something as simple as getting the power and water switched on at a new place. Utilities companies often require that people with low credit scores pay a deposit to receive service. People with high credit scores normally don't need to do this.

So in addition to possibly paying a much larger security deposit for an apartment, you might also need to pay more deposits to the utility providers. As you can see, move-in costs could be far more expensive if your credit rating is on the low side.

4. It can help with pre-employment screenings

About 25% of employers conduct credit checks while hiring for some positions, according to a nationwide survey by the Professional Background Screening Association and HR.com. While employers don't see your credit score, they get a modified version of your credit report that includes your accounts, payment history, and credit usage.

For certain types of jobs, your credit history could make or break your application. If you're applying for a position that will have access to money, sensitive data, or that requires a security clearance, then the employer will most likely check your credit.

5. It can help you get a smartphone and wireless service

Most major wireless carriers offer financing plans for popular smartphones. If, for example, you want to upgrade to the iPhone 14, many carriers will let you pay off the price of the phone in monthly installments. They'll also run a credit check first to see if you have a track record of paying your bills on time.

A credit check is also usually required to get postpaid wireless service. You can, however, avoid this by opting for a prepaid cell phone plan.

There are several ways that a high credit score makes life less expensive and more convenient. If you haven't already, it's well worth learning how to increase your credit score so yours is a help and not a hindrance.