Even though it might be possible to survive with bad credit, why would you want to? It’s not easy and it’s not cheap.
Setting yourself up with a good credit score makes your financial life so much easier. Here are some reasons why you should consider improving your credit score.
Low Interest Rates on Credit Cards and Loans
Interest rate is the cost you pay for borrowing money which is tied to your credit rate.
Having a good credit score makes qualifying for lower interest rates easier which means you’ll pay lower finance charges on credit cards and loans
Better Chance for Credit Card and Loan Approval
Borrowers with a lower credit score try to avoid applying for loans and credit if possible because their approval is a seemingly uphill battle.
Even though having a good credit score doesn’t mean that you will be approved automatically, since lenders also consider factors such as incomes and debt, it does increase your chances of being approved. This means you can walk into that bank with bravado (and a little bit of a swagger) because you know the odds are in your favor.
Negotiate More Money at a Lower Cost
A good credit score allows for a bit more leverage with lenders because you’re able to negotiate lower interest rates whether it’s a loan for a new car or a home loan. There is nothing more disappointing than applying for a loan for a specific amount and only being approved for a much smaller loan.
The chances are high that you are receiving appealing lending and credit terms from other banks and financial institutions due to your good credit score and this grants you more bargaining power (you know, since you’re the hottest borrower on the block). Having a bad credit score takes the power out of your hands and places it back in the hands of creditors.
Easier Approval for Rental Houses and Apartments
More and more landlords are using your credit score as part of their screening process. So not only can a bad credit score affect your ability to loan money, but it can also affect where you stay.
Having a good credit score means that you avoid the trouble of finding a landlord that is willing to accept a renter with a bad credit score. Trust us, these types of landlords are few and far between.
Better Car Insurance Rates
You bought that new car you’ve been dreaming about for a while and now you want to get the best insurance possible for your baby. Except it turns out you have a bad credit score and now your insurance premiums are sky-high and you’re forced to go for a cheaper insurance option for your dream mobile.
With a good credit score, you’ll typically pay less for insurance than similar applicants with lower credit scores.
Easily Get a Cell Phone on Contract
It’s time for you to replace that phone that’s had its screen replaced an embarrassing number of times, but you seem to be unable to get approved for a contract and the only option you have is to pay-as-you-go.
Don’t get stuck in this situation. Cell phone service providers may not give you a contract or may request you to pay extra on your contract until you’ve established yourself with the provider, if you have a bad credit score.
You’ll be better prepared for the future
When you have a good credit score, you are much more likely to meet the guidelines to be approved for a loan, meaning that you will be able to borrow when you need it most with minimal waiting times.
Whether this is applying for a credit card to make necessary payments or applying for a loan to help you during a life-changing transition.
Bragging Rights
If all of the above-mentioned benefits aren’t enough for you, here’s the best one…bragging rights. A good credit score is something to be proud of, because it takes a lot of hard work to maintain a good credit score and take a credit score from bad to good.
So go ahead and tell all your friends about that credit score and revel in the fact that you get to live comfortably.
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