You’ve probably heard people mention that it’s important to have a good credit score, but what exactly does this mean? Knowing your credit score and why it’s important can help you make decisions that can improve your financial future over the long term, whether you are applying for a loan or looking to rent an apartment. A good credit score may also make your life easier in other ways, such as by allowing you to qualify for more affordable health insurance rates and in some cases avoiding higher interest rates on loans like car loans or mortgages. Here are three reasons why your credit score matters.
1: A Good Credit Score Saves You Money
A good credit score is important because it can save you money. For example, if you’re buying a car, your interest rate will be higher if your credit score isn’t great. Additionally, a low credit score could mean that you’ll have to spend more on insurance premiums. Finally, leasing or renting an apartment might also cost more if your credit score isn’t in the best shape. Your Credit Score Affects You from Shopping to Applying for Jobs: Not only does a bad credit score hurt your wallet, but it also affects you when shopping for apartments. Banks and employers look at your credit report before they decide whether they want to do business with you or not. It’s important to take care of any outstanding debts so that you can maintain a good credit score so that other people won’t think twice about doing business with you too!
2: Credit Score Helps You Get a Loan
a) A good credit score helps you get a loan. If you’re looking to purchase a home, car, or anything else, your credit score will be checked before you are approved for the loan. This means that if you have a low credit score, then it will be difficult to find someone willing to lend you money. In some cases, people with low scores are unable to qualify for loans at all and they may not even know why their application was rejected.
b) A good credit score can help save money on loans and insurance. When someone takes out a loan or gets insurance, the lender or insurance company checks their credit report as part of the process. They look at how responsible this person has been in making payments in the past, whether there are any outstanding debts. Someone with a good credit score might see lower interest rates and premiums on an auto insurance policy because they’ve shown themselves to be more reliable in making payments over time. People who have poor scores might see higher rates and premiums because they’ve demonstrated less responsibility when it comes to paying off debt or meeting other financial obligations in the past.
c) Keeping your credit score high protects against identity theft: You should also remember that having a bad credit score can make you more vulnerable to identity theft because lenders don’t want to extend you any lines of credit if they think there’s a chance, you’ll default on them.
3: Boosts Your Career
Your credit score can affect more than just your ability to borrow money. It can also affect your career. If you have a bad credit score, it may be harder for you to find a job or get a promotion because employers may worry about your reliability. On the other hand, if you have a good credit score, then an employer will see that you’re reliable and trustworthy. In some cases, they may even offer you more hours or pay! In addition, it affects whether or not you’ll qualify for certain types of loans – such as those with low-interest rates. Finally, having a good credit score means you’ll have access to better insurance deals and lower utility bills.