4 Ways a High Credit Score Can Benefit You
Great credit could really be helpful in more ways than one.
- Having good credit makes it easier to borrow affordably.
- There are other lesser-known perks of having a strong credit score.
Your credit score may not be something you spend a lot of time thinking about -- but you really should. The higher your score is, the more you stand to gain in several aspects of life. Here are just some of the ways a strong credit score can work to your advantage.
1. It can help you snag a lower borrowing rate
Need to finance a vehicle purchase? You're likely to score a lower borrowing rate on an auto loan if your credit score is in great shape. Similarly, if you're looking to buy a home, you'll be more likely to qualify for a lower interest rate on a mortgage if your credit score is strong. And the less interest you have to pay on whatever loan you take out, the more money you get to save.
2. It can help you rent a home
Landlords commonly run credit checks on tenants before agreeing to let them sign leases. The higher your credit score is, the more likely you are to get approved for a rental. This especially holds true these days.
Many landlords got burned during the pandemic when an eviction ban was enacted, making it so tenants couldn't get kicked out of their homes when they weren't paying rent for months on end. That rule was put into place due to an unprecedented unemployment crisis, and thankfully, the labor market is in far better shape today. But still, in the wake of that eviction ban, landlords are more likely to favor tenants with a strong credit history and score.
3. It can help you qualify for a great credit card offer
Those credit cards offering extra cash back at the pump and awesome sign-up bonuses? Not everyone is eligible to get them. The stronger your credit score is, the more likely you are to capitalize on great credit card offers -- and enjoy perks like extra rewards.
4. It might save you money on insurance
You'd think your credit score wouldn't really play a role in your insurance premiums, since you're paying for a service rather than borrowing money. But actually, auto insurers and homeowners insurance companies alike often have a practice of looking at applicants' credit scores. And the higher yours is, the more of a deal you might snag on your premium rates.
It pays to boost your score
Clearly, there's much to be gained by having solid credit, so if your score could use some work, take these steps as soon as possible:
- Review your credit report for errors and correct those that could be bringing your score down.
- Pay all incoming bills on time.
- Whittle down your credit card balances.
- Get added as an authorized user to a family member's credit card if your lack of a credit history is hurting your score.
You don't need to have perfect credit to take advantage of the above opportunities. But it definitely pays to get your credit score into the mid-to-high 700s or higher. Once your score reaches that point, it really does open up a world of potential benefits.
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