Why You Should Build Your Credit Score
These days our credit score is being used to determine all of our finances. It is becoming more and more important to have a good credit score. Here are all the reasons why!
These days you can hear a lot in the news about how everyone is clamoring for the best possible credit score. But have you ever stopped to wonder why that is? Why is it that everyone wants the best credit score that they can get? Well there are many benefits to having an excellent credit score. Most businesses and major accounts are starting to use our credit scores as their number one indicator of our trustworthiness. Here’s how…
Your mortgage or lease. Having a high credit score will get you a great rate on your mortgage or help you secure a rental place. Most apartments and other rental housing are now pulling your credit score to determine if you will be likely to pay your rent on time. Many property managers are now offering the incentive of no deposit if you have a decent enough credit score.
Cell Phones, electric service, and internet services. Like with the rental housing, these services generally require that you put down a deposit in order to start service. These services are now starting to use your credit score to determine how much to charge you for your deposit. In some cases an excellent credit score can save you from having to pay any deposit at all. These services may even be able to offer you lower rates with a higher credit score.
Car insurance. Your car insurance service may be able to offer you a preferred rate if you have a higher credit score. For the insurance company, seeing that you have a higher credit score indicates to them that you are a responsible person. Being responsible correlates to being a good driver and it is assumed that you will need to use your insurance services less often.
Credit offers. When you have a low credit score, you have to beg credit card companies to give you a chance. When you have a high credit score, credit card companies beg you to give them a chance. The higher your credit then the more likely you are to receive offers for credit and lower rates on those offers, which can help you out when you really need it.
Auto loans. When you have a bad credit score, most auto lenders will work with you to get you the best rate that they can. But there’s only so much that auto lenders can do, and generally the best rates will be given to those with the best credit scores.
It is estimated that people with low credit scores will pay approximately $250,000 more due to higher interest rates during their working years. So how do you build your credit back up so that you can start saving your money for what’s most important? Most people think that the best way to build a good credit score is to stop having credit, but actually the opposite is true. You have to have some credit in order to establish a positive credit history. To help yourself get back on the right track you need to have at least one line of credit, and it’s best that that line of credit be in something important that you are more likely to keep track of, like an auto loan. Be sure to look for a line of credit that you can afford, and try to get your credit back on track right away! The longer you wait, the worse your credit will get.
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ABOUT THE AUTHOR
Jessica Harmon is a staff writer for Scott McCorkle's Credit Capitol. If you would like more information about our auto loan program and how we can help you find an auto loan that you can afford, please visit our website!