Paying bills on time, keeping debt at a manageable level, not extending yourself beyond your ability to pay, refraining from pulling your credit too often, and regularly checking your credit and credit score can have many beneficial impacts.
A high credit score is not just a means to show that you are a responsible person and can manage your debt. It often provides you with privileges not extended to others, and who doesn’t like preferential treatment? For the sake of this article, we will reference a “great” credit score of one being 700 or higher.
Here are Five Benefits to Maintaining Great Credit:
1. Better Rates: When you have a high credit score, you are able to negotiate and be offered a lower rate for loans. And when you are purchasing a car or a home, that lower interest rate can save you hundreds and thousands of dollars over time. Lenders are more apt to give a lower interest rate to someone who has consistently maintained timely payments.
2. Flexibility in Payment Plans: You may have more of a say in your payment plans if you maintain good credit. Certain companies are more lenient and flexible with your payment plan if you can show that you do intend to pay off the purchase in a timely manner and within the terms of the agreement. Making a furniture purchase? You may qualify for zero percent financing or same as cash if you have excellent credit. This allows you to have your furniture but pay it off over time without accruing interest.
3. Lower Insurance Premiums: House, car, boat, or RV insurance can add thousands of dollars to your debt. However, for some companies, they are likely to offer low premiums if you have excellent credit. Your credit score may be an indicator of the likelihood of you making a claim and having your insurance company take a loss on your policy. It’s not always the case, but it has been used in some insurance companies when calculating a premium.
4. Rewards and Bonuses: People who maintain a high credit rating are often inundated with requests from credit card companies to open accounts with them with a reward or bonus being an incentive. And once established, your payment plan can also be used as an indicator of the types of rewards and bonuses you will receive.
5. Hiring Opportunities: A poor credit rating can keep you from getting a job or advancing in the job you have. Employers look at credit reports and access how responsible and capable you are by how timely you pay your bills. And if you are applying for a job that has anything to do with budgets or finances, your credit report can give away how well you pay or do not pay your bills. And how you manage your bills reflects on how a company wants to use you to pay their bills.
The credit report is a fair and accessible indicator of you as a person. It shows how responsible you are, how you handle payments, debt, and finances, how long you have had credit, and if you have been delinquent or had trouble making payments. Fair or not, it is widely used in this world to get ahead, make purchases, get a house, insurance, a job, and more.
It’s never too late to work on your credit. If you find yourself in financial distress and need the help of an experienced attorney who can advise you and get you back on track, Khan Law can help. Visit our website for more information.