Most people understand that their credit scores play an important role in helping them get approved for loans and credit cards, but credit scores aren’t just important for borrowing money. Your credit reports and scores have a significant impact on your financial well-being in several ways. From saving money on utility bill deposits to securing better job prospects and even gaining access to desirable retirement communities, here are eight ways a higher credit score can enhance your life.
Lower Utility Bill Deposits
When setting up utilities such as electricity, water, or gas, utility companies often require a deposit from customers with lower credit scores as a precautionary measure — If the customer doesn’t pay their bill, the utility company still has their deposit to cover costs of their service. However, with a higher credit score, you can often reduce or avoid these deposits, keeping more money in your pocket.
Lower Insurance Premiums
Many insurance companies take your credit score into account when determining premiums. Statistically, individuals with higher credit scores are seen as more financially responsible and less likely to file claims. As a result, when you have a higher credit score, you may be able to enjoy lower rates on auto, home, life, and even health insurance policies, which can potentially save you hundreds or even thousands of dollars annually.
Favorable Loan Terms
When you’re looking to buy a car, purchase a home, or finance other expenses, a higher credit score can often unlock better loan terms. Lenders typically offer lower interest rates and more favorable repayment options to borrowers with higher credit scores. This can translate into substantial savings over the life of the loan.
Lower Interest Rates on Credit Cards
Individuals with higher credit scores are attractive customers to credit card issuers. These individuals are more likely to get credit cards with lower interest rates, higher credit limits, and attractive rewards programs.
Enhanced Job Prospects
Many employers conduct credit checks as part of their hiring process, particularly when the position involves financial responsibilities or handling sensitive data.
Access to Better Rental Opportunities
Renting a home or apartment may be easier and more affordable with a higher credit score. Landlords often consider credit scores when evaluating potential tenants. A solid credit history shows landlords your ability to make timely rent payments, which makes you a desirable tenant.
Desirable Retirement Communities
Some retirement communities and senior living facilities conduct credit checks as part of their application process, according to The Wall Street Journal. A higher credit score can be an advantage in securing the retirement lifestyle you want because it demonstrates your financial responsibility and can increase your chances of being accepted into the community of your choice.
Improved Access to Financial Services
Banks and financial institutions may be more likely to offer their best products and services to individuals with higher credit scores. That may include premium checking accounts with higher interest rates or exclusive credit cards with exceptional benefits.
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