Why is a Good Credit Score Important?

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Why is a Good Credit Score Important?

Some people are serious about maintaining an excellent or good credit score. Others don’t put nearly as much stock in this. While the decision is yours, you should always strive for the highest possible score.

Here are some of the many ways this will benefit you and your finances:

1. Big Savings on Interest

Imagine you’re buying a car. Or perhaps a house. If you’re making a big purchase with a loan, you want to secure the lowest possible rate. And the best way of guaranteeing this is by maintaining a good credit score.

Lenders take on less risk with consumers who have good credit. They’ve shown the ability to repay their loans in full and on time, and that gives them peace of mind.

2. Access to More Credit Cards

This doesn’t mean you should go out and apply for as many credit cards as you can find. However, it does provide you access to a larger selection of credit cards, thus improving the likelihood of finding one that suits all your wants and needs.

The best credit cards have a lot in common, ranging from a competitive interest rate to cash back to a higher spending limit.

3. Easier to Rent a Home or Apartment

Finding a home or apartment to rent is difficult enough. When you add in bad credit, it’s even more difficult to find a place to hang your hat.

While not always the case, rental management companies and landlords often check credit reports and scores for a better idea of your financial history. If they don’t like what they see, your application could be denied. And if that happens, you’re back at square one.

4. Save on Car Insurance

Who doesn’t want to save on car insurance? If you have a high credit score, you’ll qualify for the lowest possible car insurance rate. Conversely, if your score needs some improving, you could find yourself paying more than you’d like (at least for the time being).

5. Security Deposit Requirement

Are you initiating utility services at a new home? How about entering into a contract with a cell phone carrier?

It’s frustrating to learn that you have to make a security deposit. Even if you get it back in the future, it’s still money out of your pocket for the time being.

Where Does Your Credit Score Stand?

Now that you know why it’s important to maintain a good credit score, it’s time to do two things:

  • Check your score
  • Determine the steps you can take to improve it (such as paying down debt)

As your credit score climbs, you’ll begin to realize the positive impact it’s having on your life. And once that happens, you’ll never want to go back to your old way of living.

There’s no denying that a good credit score will save you money, all while giving you peace of mind!

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