Having Good Credit Can Help You Save in the Long Run

Written by Barbara Davidson

February 3, 2020 • 2 minute read

Improving Your FinancesYour Credit Health

Improving Your FinancesYour Credit Health

Do you remember the last time you applied for a credit card or personal financing? Your credit score would have been a big deciding factor in whether or not you were approved. But did you know that your credit score affects much more than your ability to qualify for credit? Check out the list below to see just how many ways your credit score impacts your life.

1. Renting a house or apartment. Landlords run credit checks to see your payment history and determine the likelihood that you’ll make payments on-time.
2. Purchasing a home. Typically, the better the credit score, the lower the interest rate.
3. Paying for utilities. Utility companies will sometimes require an upfront deposit from a new customer depending on their credit score.
4. Refinancing. A lower credit score can restrict refinancing. A higher credit score can improve the likelihood of qualifying for refinancing, which could result in a lower interest rate and savings for the years to come.
5. Signing up for a cell phone plan. Carriers are more likely to add additional fees or even require a deposit if they think a customer will have trouble making payments based on their credit history.
6. Getting an auto loan. Higher credit scores are often rewarded with favorable financing terms, like a low interest rate.
7. Paying auto insurance. It pays, or rather, saves, to have a good credit score when it comes to auto insurance: “Drivers save an average of 17% on annual premiums each time they move up one credit score tier.”¹
8. Moving your career forward. It’s becoming more common for employers to check credit scores as part of background checks. Though unfair, a lower credit score could potentially sow doubt in the hiring manager’s mind about that candidate’s responsibility.
9. Impacting your credit limit. Making payments on-time and earning a healthy credit score means credit card companies are likely to reward that fiscal responsibility with an increased credit limit.

The big takeaway from this list? Working to keep your credit score on the higher end can make a big difference in your life, whether it’s purchasing a home for the first time or landing the perfect new job. You can start improving your credit with helpful financial tips from our post, 7 Lifestyle Changes That Can Help You Move Forward Financially.

References:

¹Daly, Lyly. (Nov 22, 2018). Five Sneaky Ways Your Credit Score Affects Your Life.