By now, you are well aware that credit plays a significant role in your financial success. But are you aware of how widespread the influence of your credit is?
Most consumers know that credit scores are important, but usually don’t know how often their credit makes an impact on their life. Credit scores mostly come into play when applying for some form of new lending, which is why it is very important to check your credit reports before applying for a loan or credit card. There are plenty of occasions when a good credit score will help you save money or reach your personal and financial goals, which is why you should regularly check your reports.
Here are a few ways your credit can help you:
1.Apartment Hunting:
Rent payments generally are not reported to the credit bureaus, but having a strong credit profile shows your ability and willingness to pay your bills in a timely manner and can help you get into your apartment. In a competitive rental market, which currently exists, a better credit score will make your search quicker and easier.
2. Setting Up Utilities:
If your utility provider notices that your credit profile has signs of late payments, you may be required to put down a deposit, or a higher than normal deposit when you sign up. These deposits are usually refunded or credited back to your account, but nonetheless, it is better to not have to put down a deposit in the first place.
3. Car Shopping:
Unless you’re planning to pay cash, you will need an auto loan. The better your credit score is, the lower your interest rates will be. Lower interest rates can also be obtained with a larger down payment, but a higher credit score will be a benefit in any scenario.
4. Insuring Your New Car:
Insurance underwriters can use your credit score while determining your auto insurance premium, and in some states your credit score will have a significant impact on what you pay. According to industry experts, a credit score can be a better predictor than your driving record.
5. Buying a home:
Mortgages are huge loans spread over many years, so a few credit score points can translate into tens of thousands of dollars of savings. If buying a home is not on your immediate radar, you should still be monitoring your credit and trying to improve your profile, so when you’re ready to buy, your credit score gets you the most value for your money.
6. Emergencies:
If you don’t have the savings to cover an emergency, you will likely need some sort of financing. Great credit will give you access to a variety of lending options from low-interest credit cards to personal loans. A stressful situation will only gets worse when you start missing payments because you can’t get a loan.
7. Repaying Student Loans:
Depending on your current student loan rates, you could stand to save a lot of money by exploring refinancing options. A lower interest rate requires a good credit score, the longer it takes to improve your credit, the more money you will lose in interest.
Your credit profile will determine a variety of aspects of your life, adding up to have a very significant impact on your financial life in the long run. Make sure your profile will help you.