Understanding the benefits of a good credit score* may help you have a better grasp of your finances as a whole — and may even help you save money over time.
This is because the way in which consumers pay their bills and manage their credit accounts affects their credit reports and scores — and a good credit score may make all the difference when you're applying for a loan, employment or a place to live. For example, if you have a credit score above 700, you may see your loan approved easily, get hired for a new job and land a great apartment.
Before applying for a place to rent, request your credit reports from the credit bureaus to gauge your financial standing. If you have a good credit score, you may be able to separate yourself from the rest of the field because it will indicate that you are likely to pay your rent on time.
Landlords, like all business people, want to ensure they see a return on their investment; the more likely people are to pay their bills at the end of the month, the more favorably those people will look in a landlord's eyes. In other words: the higher your score, the lower their risk.
Your credit rating plays a significant role in the insurance premiums you pay each month. A good credit score may indicate to an insurance provider that you make smart and responsible life choices and, therefore, you may be less likely to file a claim. Filing fewer claims may mean the insurance company won't have to pay out as much money. With this in mind, consumers with a good credit score may be able to secure lower premiums, using their low risk factor as a bargaining chip.
Credit and Loans
A good credit score will help you get the best deals on a low-interest credit card or mortgage. Similar to insurance companies and landlords, lenders view a high credit score as a sign that you will make timely payments each billing cycle. And if you have a good credit score, you may be able to use it to help secure a credit card with a low APR, no annual fee and a money-making rewards program. Likewise, a strong score may help you secure a low-interest auto loan or mortgage, which may drastically reduce the cost of a car or home over the long term.
Moreover, checking your credit reports and scores may help you learn where your score currently stands and whether you need to make changes to the way you handle your finances in order to alter your score.