Benefits of Having a Good Credit Score

Having a good credit score shows you are financially responsible. Lenders, employers, rental agencies, and other service providers look at your credit score to determine your rates and eligibility. The higher your score the more benefits you will receive.

Most credit scores in the United States are calculated by FICO or Vantage Score Solutions.

FICO scores range from 300-850, Vantage Scores fall within that same range.

Here are some examples of the benefits that come from maintaining a good credit score.

Insurance Premiums

When you apply for homeowners and automobile insurance the insurance providers pull your credit report. Your credit score and other factors determine how much you will pay for coverage. A low credit score may not prevent you from obtaining insurance, but you could be labeled as high risk which can increase the rates you pay for coverage.

Qualify for Better Credit Cards

Your eligibility when applying for a credit card depends on your credit score, having a low score can prevent you from obtaining a credit card. Good credit standing allows you to take advantage of the best credit card offers with no annual fee, higher credit limits, low APR, travel rewards, cash back offers, and other perks.

Rentals & Loans

Landlords often check your credit history when you apply for a rental. A low credit score or negative remarks on your reports can prevent you from obtaining a rental. A high score can lead to prompt approval and may even result in obtaining additional benefits, such as waivers for security deposits.

Mortgage lenders also pull credit reports, and you can be approved or denied credit based on your credit score and history. You will pay lower interest rates if your score is high.

The same is true when you apply for a loan or financing to purchase a vehicle. Higher scores mean lower interest rates potentially saving thousands of dollars.

Utility Services

Credit is considered when you apply for utility and mobile phone services. You will more easily be able to obtain these services when you have a good credit score, some utility companies and cell providers may even waive security deposits if you are credit worthy.

Employment

Many employers look at your credit reports as part of a background check. While you may be able to get a job with less-than-perfect credit, employers might see things like late payments, a low credit score, collections, and bankruptcies as possible red flags.

Maintaining a good credit score has many advantages. To acquire and maintain good credit standing, pay your bills on time, late payments and delinquencies are the fastest way to lower your score.

If you have past-due accounts, bring them up-to-date and keep them there.