The Financial Perks Of Maintaining A Good Credit Score
Maintaining a good credit score is of utmost importance for keeping your finances in check. Credit scores are calculated based on a number of factors. These include how much you owe, how many credit card accounts you have and your recent payment history.
A low credit score represents bad financial management, and can hinder financial opportunities for you in the future. Therefore, you will want your credit score to be as high as possible. Scores of 680 and higher are considered good credit scores, however this can vary depending on the credit reference agency.
It pays to keep an eye on your credit score. You can use websites to check your credit status for free, such as My Credit Monitor. This can help you see where your credit score lies, and let you know how to improve it. Here are some of the ways keeping a high credit score can benefit you.
Better Mortgage Rates
Keeping your finances in check can save your finances for the future. Before taking out a mortgage, banks will check your credit score to see how responsible you are with your money. Having a high credit score will let you know you are a responsible borrower, and will likely net you a better deal.
This can mean you get lower payments and pay significantly less interest. As mortgages are such a long term loan, saving a little money bit by bit can amount to huge savings in the long run. Keep your credit in check now and it will save your credit in the future!
Better Credit Card Deals
Credit card companies do not want to give more leeway to people who owe a lot of debt. Therefore, if you have a good credit score, they will trust you with higher limits and lower interest rates.
Some credit card companies will also offer extra rewards for those with good credit scores. These perks can include frequent flyer miles and cashback on purchases. Credit score is important to credit card companies for calculating how much you deserve, so having a good score is very beneficial.
Banks will approve loans for you much faster if your credit score proves you can handle your finances. You will also have access to the best loan deals, whether you want a loan for a car, business or personal reasons.
Having bad credit severely limits your options when it comes to loans. This is why you always want your credit to be in pristine condition- don’t borrow anything you won’t be able to pay back in due time.
Your credit score also comes into question when renting property. Landlords want tenants who they trust to pay rent on time, so a bad credit score can lead to you being refused for renting a house or apartment.
This also applies to other rentals. If you want to rent a holiday home for a few weeks, your credit score may be checked. Rental car services may also carry out checks on your credit score. Bad credit means rejection in many cases.
Evidently, credit scores are brought up in all kinds of financial situations. Therefore, it is important you regularly check yours and make sure to keep it at a good level.