Your credit score and history are key parts of your financial life. It plays a major role in many important financial situations in your life. A lot of people feel that a credit score matters when getting approval for a credit card or loan. But it’s more than just loans and credit cards.
It defines a lot more than the interest rates the loans you can get. Insurance companies use credit scores to establish premiums for landlords and auto coverage. Homeowners use credit scores to select renters. Also, credit scores decide who gets good mobile phone plans and who must make larger deposits to get benefits.
Your credit score is your financial tool. But whether they can help your financial life depends on how good they are. Having said that, here are key reasons why your credit score is important.
To access financial deals
With a good credit score, you can access good financial opportunities and deals. It may include:
• Refinancing your property to a lower interest rate
• Obtaining good rewards credit cards with low interest rates, and more
Further, you might be given credit cards with signing rewards, investment accounts, and checking accounts. Gaining access to these deals will help you control your finances eventually.
To get a Job
Most employers now perform credit checks on potential employees before employing them.
You’ll find this in most financial and government sectors. If you have a bad credit score, these employers may not hire you.
To avoid paying more
Yes, some states don’t allow insurers to use your credit history for establishing insurance premiums. But some allow it. So if you have a bad score, you may need to pay more to cover it.
But, you can pay less in insurance premiums throughout for a long time by increasing and impacting your credit score positively.
To buy a home
Buying a home is a huge investment. But with a bad credit score, it may be may hard ones to achieve. The depression caused foreclosures and short sales. While the real estate market has recovered, banks still apply care while lending. Presently, there are more powerful requirements to pass for a loan. If you choose to rent, know that the homeowner will carry out a credit check. If you have bad credit, renting becomes difficult. Also, you may need to pay a bigger deposit amount.
To be eligible for better terms when signing up for Internet or cable
Many cell phone, TV, and internet service providers now review your credit before linking you up with service. In most cases, if you have bad credit, you may not get an account. But if you get set up with a service, you may need to pay some fees up front or make a security deposit. It can be expensive and frustrating as it can affect your budget and alter your monthly cash flow.
Have you reviewed your credit score lately? If no, we advise that you do it annually to know if you are behind. Don’t forget to check it out today.