Having a good credit score can open the door to various financial opportunities, from applying for low-interest rates on loans to getting approved for credit cards. But what is it about having a good credit scores that makes it so important? Here are five reasons why you should care about your credit score.
1: Access Better Interest Rates on Loans and Credit Cards.
A good credit scores is one of the major factors in determining a borrower’s interest rate. Having a higher credit scores means lower interest rates on loans and credit cards, which can save you hundreds or even thousands of dollars over time. Credit Card companies also use your credit score to approve you for specific cards and determine what type of rewards and benefits may be available to you based on your score.
2: Qualify for Rental Agreements.
Your credit score is also important when you’re trying to rent an apartment or other property. Many landlords pull your credit score to make sure you’re a reliable tenant and can make rental payments on time. What’s more, a low score can limit your opportunities; some landlords are required by law not to rent to people with significantly lower scores.
3: To Get Better Credit Card and Other Loan Rates.
One of the most practical reasons your credit scores matters is when you want to take out loans and credit cards. Your credit scores helps determine the interest rate lenders will offer you, so, as far as they are concerned, it’s better if it’s higher. A good credit scores can help save you hundreds or even thousands of dollars over the life of a loan by qualifying you for better rates.
4: To Get Approved for Mortgages, Car Loans, and Other Lending Products.
While good credit is essential to get approved for most lending products, even those with bad credit may be able to get approved as long as their score is at least over a certain point. That said, people with better scores will likely qualify for lower interest rates and higher loan amounts. So if you want the best terms available when it comes to loans and mortgages, having a solid credit score is essential.
5: Secure Lower Insurance Rates.
Your credit score can have an impact on the insurance rates you get offered by many companies. Those with higher credit scores tend to pose less risk to insurers and can be charged lower rates as a result. So, if you’re shopping around for car or homeowners coverage, make sure to check your score before applying to get the best deal available