Why Having a Good Credit Score is Essential for Your Financial Life

Why Having a Good Credit Score is Essential for Your Financial Life
  • Opening Intro -

    While many people don’t notice it, a good credit score is very significant to anyone’s financial life.

    Contrary to common belief that you will only need a good credit score when requesting for a bank loan, these days credit scores are considered in many other financial situations...

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While many people don’t notice it, a good credit score is very significant to anyone’s financial life. Contrary to common belief that you will only need a good credit score when requesting for a bank loan, these days credit scores are considered in many other financial situations. This post has highlighted reasons a good credit score will make your life easier and why you should keep a clean credit score.

1. Quick loan approvals

Banks consider many other factors before approving any loan request, but top among those factors is your credit score. A poor credit score will delay request approval or even result in a denial.

Again, your loan capacity increases when you have a clean credit history. You can borrow as much as you want because the lender is confident you will pay back. The interest you are required to pay back is also significantly reduced if you have a good credit score.

2. Stronger bargaining power.

With a stellar credit score, you have a stronger bargaining power. You have the leverage to confidently bargain for lower interests on, for instance, a loan, or a credit card, among other things.

With an excellent credit score, you stand a greater chance of suggesting and even choosing terms of credit you are comfortable with.

3. Best insurance rates.

Often, insurance firms use credit scores to determine the premiums a client will pay. You are sure to get more affordable premiums rates with a good credit score.

Insurers carefully consider risks. So if you have a bad credit score, you are bound to incur a lot of costs in premiums every month. This is also due to the insurance firms’ proposition that people with not-very-good credit scores are likely to file claims.

4. Better credit cards.

With an excellent credit score, you can get better credit cards. There are those credit cards (you probably have seen them on TV adverts) with great perks, excellent rewards, cash backs and low introductory rates. You will need a good credit score to have one of those. With such a credit card, you have larger credit limits besides also having the flexibility to buy anything, anytime, anywhere.

5. Quicker approvals for good rental apartments.

Many landlords are nowadays using credit scores in deciding whether or not they will take an individual as a tenant. When you don’t have a credit history, or you have a bad debt history or payment delinquency, they may become nervous. While you may be allowed to rent, you are most likely going to pay a very high-security deposit.

Having a stellar credit score will make them rent to you quickly. Besides, you also have the freedom to choose the kind of house or tenant you want when you have an outstanding credit history.

Other benefits of improving your credit score include the fact that these days, employers (especially in jobs that deal with cash) are increasingly using credit scores to determine responsibility levels of prospective employees. So if you have a poor debt history, you may lose a job opportunity. Again, it goes without saying that you are most likely going to get better utility services with a good credit score.

Hopefully, this article has been helpful to you. You now understand why maintaining a good credit score is important in anyone’s financial life. Share this post with your friends on social media so that they are also aware and consequently, they can also maintain excellent credit histories to enjoy the above benefits.

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Categories: Credit Management

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