For many people, the journey to having a good credit score is such an uphill task that they settle with their bad credit and just finesse their way through life. While you can always survive just fine with a bad credit score, it is not very easy and it is most definitely not cheap. With a good credit score, you can save more and live an easier life.
Not to mention you have bragging rights.
If you are not sure why you need to maintain your good credit or improve your credit score, here are 7 benefits of having a good credit score. If you need inspiration to get started with turning around your credit score, think of each benefit for each day of the week
As earlier stated, a good credit score does not only come with a plethora of benefits, it also comes with bragging rights. If you have put in work to take your credit score from bad to good, you feel a sense of pride and accomplishment.
But beyond bragging rights, having a good credit score means…
Low-interest rates on loans and credit cards
Borrowing so much that you incur a bad credit score comes with a price – your interest rates are directly tied to your bad credit score. What this means is you have to pay higher finance charges on loans and credit card balances. A person with good credit score, on the other hand, would get the best interest rates and pay lower finance charges on their loans and credit card balances.
The catch here is, the less money you have to pay as interest, the more money you can save and repay your balance and loans.
More negotiating power
With a good credit score, getting a loan or even bargaining for lower credit card interest rates is easier. When negotiating with the banks or a loan company from the standpoint of a person with good credit score, you can always throw in the great offers that you have received from their competitor companies based on your good credit score.
On the other hand, a bad credit score limits your bargaining power as creditors would most likely not budge on your loan terms. Not to mention that you don’t exactly have the freedom to shop around!
Better chances for loan and credit card approval
If your credit history is marred with a bad reputation, then you would do well to stay away from making new loan or credit card applications – chances are that you would get a no from the creditor.
While having an excellent credit score is no guarantee that you would always get a yes from the creditor, you have a much better chance of getting the nod.
You get higher limits
Your income and credit score affect your borrowing capacity – and with a good credit score, banks would be more willing to lend you more money seeing as you have shown that you can repay a loan. This does not mean you cannot get a loan with a bad credit score, but your borrowing limit would be more stringent than that of someone with a good credit score.
Easier approval for apartments and rental houses
Your credit score tells a lot about your money spending habits and even landlords have begun to use credit scores as a way to screen tenants. If your bad credit score was caused by an outstanding rental balance or previous eviction, chances are that you would not get the apartment you crave!
With a good credit score, you don’t have to go through the hassle of finding a landlord who is yet to get with the trend of credit score screening!
Better insurance rates for your car.
So along with the long list of businesses that leverage on your bad credit score as a reason to turn you down, car insurance companies would also be using that bad credit score against you.
Most insurance companies believe that a person who has a bad credit score would most likely file more claims and as a result, they penalize people with bad credit score by throwing in a higher insurance premium.
A person with a good credit score, on the other hand, pays less for car insurance!
The list is almost endless!
It’s a cruel world out there with a bad credit score!