Benefits of a Good Credit Score
If you have poor credit then you will still survive, but it will not be as easy and will definitely not be cheap. If you are looking for motivation to boost your credit score, or even just a few reasons why you should continue to maintain that good credit, here are a few expected benefits to maintaining a strong credit score.
Anytime you borrow money on a credit card or loan the lender charges you interest. This interest rate is inversely related to your credit score so the lower it is the higher the interest you will pay on your debt. By maintaining a strong credit rating you will usually qualify for the most competitive interest rate and you will also pay a decreased finance fee on loans and credit balances.
Having a great credit score will also give you a much higher chance for loan and credit card approval. If you have a poor credit history you will most likely avoid new loan or credit applications due to fear of denial or high rates. Conversely, if you have a strong credit score you are not guaranteed approval (lenders take into account other factors such as debt and income) but it certainly gives you a much higher chance of being accepted.
Moving on, having good credit is more than just a number on a page in front of the eyes of every lender you approach. Think of your score as bargaining material when approaching new companies. With a good credit score, you can negotiate with lenders to get the lowest possible interest rate on a new credit card or loan. All you need to do is make mention of your good credit score. To take it a step further, you could even mention the great offer(s) you were made from other companies as ammo for your negotiation; however, you should only do this if you have actually been offered a low interest rate from another credit company. Lying about an offer is pointless as a creditor typically will not budge on the interest terms and you run the risk of losing the freedom to shop around.
One of the major benefits to having a great credit score is your capacity to borrow. The amount you are allowed to borrow, in the eyes of a lender, is directly based off your credit score and income. If you have a great score you will be allowed to borrow more as you have already shown that you will pay back on time whatever you borrow.
Lastly, you even get a benefit for you cell phone service if you have a strong credit score. If you have poor credit then you will be unable to get a contract from a leading service provider, and will be forced to pay a higher premium with one of those pay on the go phones. With great credit, you avoid paying for the security deposit and can even get great discounts on new phones if you sign a contract.