As an adult, we learn real fast that life likes to throw costly unexpected inconveniences at us. Having an awesome credit score could be a huge relief to you when these unexpected troubles happen. Think about this scenario, your car breaks down, and you need to borrow an extra $1000 to fix it if you have an awesome credit score getting a loan to cover it may not be much of a problem at all. Let’s say you have a less than average credit score, getting that loan may cause stress, anxiety, and leave you with that empty pit in your stomach. It’s not a secret of the benefits of having a higher credit can do for you, but can you imagine the sense of freedom and relief it would give you.
What Can an Awesome Credit Score Do For You?
Interest rates are the amount of money the lending institution charges you for taking out a loan. Interest rates are charged on personal, car and mortgage loans, as well as on credit cards. The higher the credit score, the lower the interest rate. Lenders consider high credit ratings a good bet to give a loan, as it shows you are credit worthy. The difference of one percent on a 30-year mortgage loan can be tens of thousands of dollars over the life of the loan.
Lending institutions will most likely be more willing to lend larger amounts of money to higher credit score consumers. Having higher scores may also make you eligible for higher credit limits on your credit cards. The benefit of having higher limits not only gives you a greater purchasing power but if you use the credit cards correctly, it could help increase your credit score. Utilizing less than 30% of your total available credit limit could significantly benefit your credit score. Credit utilization calculates nearly one-third of your credit score.
More Rewards and Perks
Many credit cards offer the best travel points, cash back and numerous other rewards and perks for high credit score customers.Some companies credit card companies offer bonuses for signing up with their bank. These are just a few perks offered for having excellent credit.
Approval for Renting or Leasing is Much Easier
Many landlords and leasing agencies run credit checks to determine the amount of security deposit they will require. They may decide not to even rent to you depending on what your credit score is. The higher your credit score is, the more certain the landlord will be in signing a lease agreement. Higher credit shows that you are financially responsible and more likely to pay your rent on time.
Low Insurance Premiums
Many home and auto insurance companies run what is a “soft hit”(soft means an inquiry that does not hurt your credit rating) to determine your risk as an insured. Having a high credit score shows them that you are less of a risk to them. Extensive research has proven that an insured individual with a higher credit score is less likely to file a claim or having a lapsed policy for non-payment.
Don’t Let Your Score Discourage You
If you have an average or below credit score doesn’t let it get you down. An important key to the puzzle is to remember that the credit score is yours and not anyone else’s, you have the opportunity to try and improve it anytime. It is important to keep in mind that 79% of all credit reports are inaccurate and report incorrect information, and you have the right to review your credit report once a year at www.annualcreditreport.com. The CFPB also has some great information on how to get your score up and keep it up.
Having an awesome credit score can save you thousands of dollars in interest rates, insurance premiums and offer you several rewards and perks. In my opinion, the greatest benefit of having a high credit score is the opportunity to have options in case of an emergency. We never know what life is going to throw at us, and being financially strapped in the time of need can cause many emotions to erupt.