Do you know your credit score? Were you disappointed to find that it’s not as high as you were hoping? Are you interested in doing something about this in the near future?
Some people look at their credit score and assume there is nothing they can do to make it better. Others, however, realize that they can make key changes to their life in order to boost their score and take advantage of everything this will bring.
If you don’t understand the many reasons to build your credit score, here are five details to keep in mind:
1. For Pride
Let’s start here: a high credit score gives you a great sense of pride. It shows you that you are doing things right in regards to your finances.
With the average credit score in the United States right below 700, most people have room for improvement.
As your credit score begins to rise, you’ll feel much better about yourself and what the future will bring
2. To Purchase a Home
Are you interested in buying a home in the near future? Do you have hopes of securing the lowest possible interest rate, all with the idea of saving money?
This is where a high credit score can really help. Not only does your credit score impact your interest rate, but it also comes into play when determining if you will actually qualify for a loan.
The moment you realize you want to purchase a home is the moment you should review your credit score and report, all with the idea of giving it a boost.
Note: a good credit score will also help you when searching for a rental property.
3. Higher Borrowing Limits
As noted by Nerd Wallet, the average American household owes $16,748 in credit card debt.
There is never a good time to bite off more than you can chew in regards to your credit card balance, but remember this: the higher your credit score the higher your borrowing limit.
This is something that may be important to you when applying for a credit card, as a high limit may allow you to make certain purchases.
Tip: don’t mistake a high limit for an excuse to spend recklessly. You still need to be careful with how you use your credit card.
4. Greater Negotiating Power
With a good credit score to your name, you have a greater level of negotiating power.
There are many times when this comes into play, such as when negotiating an interest rate on a credit card or car loan.
Here’s something else to think about: your credit score may help you when making a credit dispute.
The other party is much more likely to take you seriously when you have a high credit score and a history of doing things the right way.
It’s nice to know that your high credit score can work in your favor as you discuss what happened in an attempt to make things right.
5. To Save on the Cost of Car Insurance
Many people believe that a good credit score only favors them when applying for a loan. This isn’t true.
Did you know that your credit score can also impact your car insurance premium?
Simply put, auto insurance companies can use a bad credit score against you. They believe that people with bad credit make more claims, which costs them more money. Subsequently, they charge people with bad credit a higher monthly premium.
So, if you want to save money on the cost of car insurance, do your best to boost your credit score. It will definitely help.
A credit score ranges from 300 to 850, with anything over 700 considered good. Regardless of where your score is right now, there are things you can do to make improvements in the future.
As noted above, a high credit score can go a long way in improving your finances.
What is your credit score? Do you know what it takes to boost this number? Are you familiar with the many benefits of doing so? Share your thoughts on building your credit score in the comment section below.