Your credit score is similar to a grade point average (GPA). Like a good GPA, maintaining a high credit rating will open a variety of opportunities that can impact your life in ways you might not realize. Explore three of the advantages of a high credit rating below.
Why Good Credit Is Important
1. Lower Interest Rates
Whether applying for a credit card or an auto loan, your credit rating will affect your interest rate. Creditors employ credit-based scoring, where they use the score to assess your risk based on how well you handle money and debts. A low credit rating tells a lender that you're high-risk and may be unlikely to pay bills on time, resulting in a higher interest rate to protect the creditor from loss. High scores show that you're responsible for your finances, resulting in lower interest rates and more generous credit limits.
2. Easier Approval for Housing
Like applying for a credit loan, property managers often use your credit score to verify whether you're a desirable candidate for rental housing. Like creditors, landlords want to make sure you'll pay your rent on time each month. When applying for a home in a competitive area, a high credit rating gives you an advantage over applicants with lower scores, making it easier to qualify in the most sought-after neighborhoods.
3. Avoid Security Deposits
These days, more service providers rely on credit scores to set up contracts or activate services. Cell phone providers and water and electric companies often use credit scores to determine security deposit amounts and whether they'll require one at all. Those with low credit may be required to pay larger amounts upfront to protect the provider from loss if they don't pay their bills. These same providers are often happy to waive security deposits for customers with impeccable payment history. In some cases, those customers may even receive perks, such as a free phone or a free month of service.
If your credit rating is lower than you'd like, contact Rock the Score in Saint Louis, MO, to help you get back on the road to financial recovery. This credit reporting company takes a hands-on approach to improve your credit by reporting your on-time payments to select credit bureaus, ensuring your payments directly increase your score. Contact them today at (314) 541-0521 to schedule a consultation, or visit them online to find out how their service works.