4 ways a high credit score can benefit you

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Great credit can actually be beneficial in more ways than one.

the main points

  • Having good credit makes it easy to borrow at a reasonable cost.
  • Another lesser known perk is having a strong credit score.

Your credit score may not be something you spend a lot of time thinking about — but you really should. The higher your score, the higher your chances of making gains in many aspects of life. Here are some of the ways a strong credit score can work in your favour.

1. It can help you lower your borrowing rate

Do you need to finance a car purchase? You are likely to score a lower borrowing rate on a car loan if your credit score is in good shape. Likewise, if you are looking to buy a home, you will likely qualify for a lower mortgage interest rate if your credit score is strong. The less interest you have to pay on any loan you take out, the more money you will save.

2. It can help you rent a house

Landlords usually perform credit checks on their tenants before agreeing to allow them to sign lease agreements. The higher your credit score, the more likely you are to get approved for a rental. This is especially true these days.

Many landlords were burned out during the pandemic when eviction bans were enacted, leaving tenants unable to evict them from their homes when they haven’t paid rent for months on end. This rule was enforced due to an unprecedented unemployment crisis, and fortunately, the labor market is in a much better position today. However, in the wake of this eviction ban, landlords are likely to prefer renters with a strong credit history.

3. It can help you qualify for a great credit card offer

These credit cards offer extra cash at the pump and great sign up rewards? Not everyone qualifies for it. The stronger your credit score, the more likely you are to take advantage of great credit card offers – and enjoy perks like bonus rewards.

4. It may save you money on insurance

You’d think your credit score wouldn’t really play a role in your premiums, since you’re paying for a service rather than borrowing money. But in fact, both auto insurers and home insurers often have a practice of looking at applicants’ credit scores. And the higher your deal, the more deal your premium rates might crash into.

Helpful to increase your score

There is clearly a lot to be gained with solid credit, so if your score could use some work, follow these steps as soon as possible:

  • Review your credit report for errors and correct errors that could lower your score.
  • Pay all incoming invoices on time.
  • Reduce your credit card balances.
  • Get added as an authorized user of a family member’s credit card if a lack of credit history hurts your score.

You do not need to have perfect credit to take advantage of the above opportunities. But it certainly pays to get your credit score into the mid to high 700s or higher. Once your score reaches that point, it opens up a world of potential benefits for you.

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