According to a research report from Experian credit bureau, the agency has seen a noticeable increase in credit scores across all generations. From silent generation to generation Z, the majority of Americans have credit scores that can be regarded as good, if not ‘higher’.
In light of the pandemic and its drastic impact on the US economy, it is good news. Why? Because a good credit score can impact the way you live your life.
While most people understand that having a good credit score history is important, only a few know the impacts of it on our lives.
We know for a fact that having good credit offers various benefits. However, we are not aware of some of the benefits that a good credit score history brings.
9 benefits of having a good credit score
Yes, all of us can survive without good credit, but it does not come easy and definitely not cheap. To make your financial life easier and to help you save money, you need a good credit score. However, most people don’t find the need to maintain a good credit score.
Here are some benefits which will encourage you to fix your credit report:
Pay low-interest rates on loans and credit cards
The interest rate is technically the cost you pay for borrowing the money. Most people who consider credit repair must know of this terminology. However, what we don’t know is that it is related to your good or bad credit score history.
For instance, if you have a ‘higher’ credit score, you will qualify for good interest rates on student loans, mortgages, car loans, etc.
Having a good credit score simply means that you will have to pay lower costs on all your loans. So, what can you benefit from low-interest rates? The lower the interest rates, the faster you will pay off the debts.
Increased chances of loan and credit card approval
As per the credit report consultation experts, you have zero to no chances of loan or credit card approval with a bad credit score. Therefore, borrowers avoid applying for new credit cards because their requests will be turned down by any bank.
Even though having an excellent credit score does not guarantee loan or credit card approval, it increases your chances. Most banks and lenders do consider and prioritize other factors such as debt and income.
In simpler words, you can always apply for a house or student loan with confidence. Your chances increase dramatically if you have a steady income with no debt to pay off.
You get the power to negotiate
With a good credit score comes the power to negotiate or request a lower interest rate for your loans. If you want to bargain, you can also consider good offers from other lenders.
On the other hand, if you have a bad credit score, most lenders will most likely set the interest rates on their terms. You won’t have any other option to accept the offer/loan with a higher interest rate.
Banks become willing to accept a higher limit request
Your money-borrowing capacity is entirely based on your credit score as well as your income. If you have a good history of paying back the borrowed money, banks will have no problem approving the request for higher limits.
Although the bank will approve your higher limit request with a bad credit score, the amount will most definitely be limited.
Rent approval for apartments and houses becomes easier
The tenant screening process usually includes a credit score. If your credit score was damaged due to outstanding rental charges or house eviction, it can decrease your chances of rent approvals.
A higher credit score saves you the hassle of finding an apartment/house owner who won’t consider your damaged credit history.
If you are looking to rent your dream place but have a damaged credit score, consult the number one credit company in the US and get all the help you need.
Better insurance rates for your car
Car insurers use bad credit scores against you. All the auto insurers fetch your insurance history and credit card report to develop the insurance risk score.
So, if you have a bad credit score, your insurer will penalize you with higher premiums. But with a maintained credit score, you won’t have to pay higher insurance rates like other applicants with a bad credit report.
No security deposits to get a phone on contract
Another drawback of not having a good credit history is that the network providers will hesitate to sign a phone contract with you. The consequence? You will have to go for one of the ‘pay-as-you-go’ plans. These plans have no problems except the phones that come with them are expensive.
However, people with a maintained credit score receive phones at a discounted price and don’t even have to pay the security deposit.
No security deposits on utilities
When moving to a new neighborhood, security deposits are a huge inconvenience and prove to be burdensome for most Americans. You won’t be thinking to relocate right now but unforeseen circumstances can shift your plans.
So, whenever you shift your service to another location, you would have to pay $100 to $200 under security deposits.
You automatically develop a good reputation
When lenders see you as a trustworthy borrower, the offers come to you. These offers sometimes seem handy, especially if you are upgrading to a new credit card, taking out a personal loan, or refinancing existing debt.
Every facet of your personal and financial life depends on the history of your credit score. If you are interested to fix your credit report, only take help from a non-profit organization.