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Maintaining a good credit score opens several opportunities that all share the same goal; making your financial life easier.
While you can live with a poor credit, doing so can be tough and costly. That is why, creditors insist that their clients keep an excellent credit history before they offer products or services on credit.
Establishing a strong credit is not only meant to help you get a credit card or reasonable loan rates. There are more financial benefits that you can take advantage of, including:
1. Eligible for Credit Card Perks
A high credit score can make you eligible for excellent credit card deals, like low interest rates, rewards, and cashbacks. In addition to helping you save money, these benefits will motivate you to use your credit card, which in turn, will raise your credit if you keep paying off the balance.
2. More Likely to Get Credit Card and Loan Approval
Borrowers with negative credit often chose not to apply for a new credit card or loan because they have been denied before.
A good credit doesn’t necessarily mean that you’ll have your approval the moment you applied. Lenders will still have to go over some factors, such as your income and debt, to determine whether they are working with a client who can pay his or her debts on time.
Still, maintaining a healthy credit record can raise your chances of getting the approval you seek. In other words, there is no need for you to think twice about applying for a new line of credit.
3. You Might be Able to Get that Dream Apartment
Just like a lender, a landlord will want to know your financial reliability and reviewing your credit score is one way to confirm that. Checking your credit history will provide him or her a better idea on your ability to make timely payments.
Nearly all landlords require potential tenants to have a credit score of around 600 or higher to approve their application.
If you were able to access rentals despite a poor credit, it may still not meet your preferences and you might be charged a higher security deposit, or your landlord will request a co-signer on the lease.
4. Get a Hold of Lower Car Insurance Rates
If you hope to receive reasonable premiums from auto insurance firms, you need to make sure that your credit score is in great condition.
Some car insurers take credit histories into account when determining monthly premiums. While an auto insurance company cannot turn you down based on credit alone, a poor credit score can weaken your shot at getting a hold of premiums at low rates.
5. Avoid Paying Deposits on Utilities
Utility providers, like cell phone, cable, internet, and electric companies examine the credit of their customers to confirm whether they will receive payments on time.
You will only be required to pay the deposit, which sometimes can cost $100 to $200 if your credit is unable to make the cut. This, however, could be troublesome when you’re moving to a new home.
Even if relocation is not in your mind, unexpected events like natural disasters could change your plans in an instant. That’s why, you must maintain a good credit score to avoid paying security deposits associated with establishing or relocating a utility service.
6. Better Chances of Landing a Job
Believe it or not, some employers would want to know about the status of your credit as part of their hiring process, although they will need your permission beforehand.
If they found out that you have a history of going bankrupt or making late payments, they may hesitate to offer you the job; they worry that these financial issues might keep you from devoting all your attention and effort on the job when necessary.
Conclusion
As you can see, credit scores have a huge influence on our lives. Being financially responsible allows you to access the benefits that a good credit score offers.
If you have just started building your credit, you need to make sure that you are establishing it on a healthy foundation. Paying your credit card debt on time is a good starting point, which could lead you to great financial opportunities.