While your credit score may not be the first thing that pops into your head when thinking about your bank account, retirement, your nest egg or building wealth, it should be.
Having exceptional credit can save you tens of thousands or even hundreds of thousands over your lifetime versus poor credit. Wouldn’t that be a nice boost?
Some of the most important ways that great credit can help you improve your bottom line may be things you have not considered.
Rainy Day Funds
Often overlooked when considering credit, the ability of an individual or family to save money for financial goals or an unexpected expense can be greatly affected by credit scoring.
In the United States, rates of savings are low in comparison to other countries (probably one of the reasons for high stress as well), and it can be a challenge for most to save anything at all. Though it sounds odd, a great credit score can help you sock away some money.
Most people know that loans depend on credit scores, but do not realize how much a subpar score can cost them. Borrowing money for a home or a car, or any other large purchase, is extremely credit-score dependent and can mean the difference between a low rate and a high one, or even qualifying for a loan at all.
The lowest mortgage rates are typically only available to those borrowers with scores above the mid-700s. Borrowing at the lowest rates on a mortgage can save you well over $100,000 in most cases.
Likewise, special interest financing rates for car loans and leases are generally reserved for those with scores above 700. That means you may not get the special zero percent rates that are being advertised if your credit is not up to snuff.
Qualifying for those special rates can save you $10,000 or more, so it’s wise to know where your credit stands ahead of time, and how Lexington Law firm and other credit repair agencies can help you jump your score and reap the associated benefits.
Jobs and Income
This is an area that most people don’t realize is so dependent upon credit scores. Some states such as California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Oregon, Nevada, Vermont and Washington ban credit screening for employees.
However, in the rest of the country, potential employers have access to look at your entire profile and history with your consent.
Of course, refusing to consent tells them you have something to hide, and probably will cost you that new and lucrative position. If you do allow them to review your credit, you are going into negotiations with a blot that you must overcome if your credit is poor.
This can have a significant impact on your future and cost you untold thousands over a lifetime.
Credit Cards, Insurance, and Haggling Power
When you have a great credit score, you have significant leverage with financial institutions and insurance companies as well. If you want a credit card with a zero rate and miles to boot, you can likely just ask and you will get that.
In fact, your mail might be full of these offers for you. Raising your credit limits in a pinch is probably not an issue either; and a quick phone call will get it done.
Did you know that insurance companies often use credit scores in their quote decisions? That’s right—your great credit can actually lower your car, home or renter’s insurance, too.
One could go on about the benefits of high credit scores: reductions in student loan rates, lower cell phone plans, reduced or eliminated utility deposits and easier financing to open a business. However, hopefully now you have enough motivation to get to work raising those scores.
Image from Pixabay
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