It takes hard work and commitment to build a good credit score. You do not need a credit in everyday financial needs, but a good credit will ease your financial strain and make your life easier.
Here are some of the benefits of owning a good credit score
Better interest rates
Lenders will give you a lower interest on loans and credit cards. Most loan lender check your credit card history and score before approving your loan. With a good credit score, you can get good loans with lower interest rates. You will pay less money on your credit balances and loans compared to people with poor scores or no credits.
You have a better chance for credit card and loan approval
When lenders check your credit card, they look for information on how you handle past debts and credits. A good credit score indicates that you pay your bills or loans on time. You have a better chance of loan approval when your credit score is good. Besides income and debt, lenders consider your credit score to have an idea of whether you are capable of making repayments or not.
Note that with a good score, you qualify for higher loan limits. When you show the lenders that you are capable of paying of high amounts of loan, they can trust you with the repayment process
With a good credit score, you have more negotiating power
You have a leverage to negotiate for lower interest rates on loans or credits when you have many pints on your credit. The trick is to refer your past offers and credit score to new lenders and get them to offer lower interest rates. With a bad credit, you may not have the freedom to shop around or choose between different offer and lenders.
It makes it easier for you to rent houses or apartments
Nowadays, landlords check the credit scores of individuals before they can approve them to be tenants. They check for past rental issues on your credit history. It is harder to find an apartment when your loan history has issues concerning rental balance and house damages in your previous apartments. With a good credit score, some landlords may ignore your past rental issues and it will be easier for you to find a house.
You will get better car insurance rates
It is nearly impossible to get good insurance policies when you have a bad credit. Poor credit card holders pay more for insurance, while good credit card holders will pay less for the same. Auto loan lenders and insurance providers say that people with low credits are known to file more claims, thus the increase in the price of the insurance.
You will pay less for security deposits
One of the worst things about a bad credit score is, you have to pay security deposits on loans, utilities and getting new credit cards. With a good credit score, you can establish a utility service or get products like loans and mortgages on discounts, without having to settle a security deposit first.
Maintaining a good score is crucial if you want to get these benefits. Check your credit report regularly to ensure you make all your loan payments on time.