You may have always heard the saying, “always keep good credit.” This term does not only revolve around getting and maxing out a credit card, but it’s so much more than that. Whether you’re applying for a long term loan from your friendly neighborhood bank or you have decided to take on a short term loan from loans Ontario, credit score affects so much more than you think.
Your credit history will affect everything from the insurance rates to the type of house you want to invest in, or even if you’re going to land your dream job; potential employers tend to check your credit score.
All these details may sound daunting, but they are true, and it’s just the tip of the iceberg. In this article, we will list out some of the top benefits of maintaining a good, if not great, credit score and how it can impact your life in the most positive way.
You will Gain Access to the Best Credit Cards
The most attractive credit cards are the ones that have the best perks, excellent rewards, a good percentage of cash back, and incredibly low rates of interest. However, to qualify, you will need to have a good credit score. Not only will you have access to low-interest rates (and any additional fees), you will also be able to rake up reward points and air miles, but when you gain access to the best credit cards, you will have a larger credit limit as well. A good credit card will give you purchase flexibility, and it will aid any financing you will need in the future.
If you have a large credit limit, it will allow you to increase your creditworthiness over some time. This shows the bank that you’re responsible with your finances, and you can handle an extensive line of credit. Once you have proved this, you will be granted a home or car loan. Many people have an assumption that credit cards can be used only for shopping, but that’s not true; they are a great tool to build a good solid credit history.
If you want to start building a good credit score, you can start asking a friend or family member you trust, if they can cosign a loan or credit card with you. You’ll agree to share the responsibility of the debt, and the loan will show up in your credit report and the records of your past payments as well. You have to note that if there are any late payments, they will show up in your credit score as well, so ensure you choose someone who is financially responsible and will cover the debt with timely payments.
You can Save Money on Cash Insurance
While there are many benefits with short term loans like loans Ontario and long term bank loans, this particular benefit can come as quite the surprise. If you have a high credit score, you may be offered a low rate on car insurance. Insurance companies analyze risk factors, and they take it very seriously. So, when it comes to your credit score, they begin investigating the risk and price of the monthly payments. Once they deem your credit score worthy, they go ahead and approve your insurance. You won’t be denied an insurance policy, but if you have a low credit score, then chances are you will have to pay a high premium. If your credit score drops after you get your policy, then the chances are that the premiums will get higher as well.
Give you Leverage and Better Negotiating Power
Whether it’s the conditions of your car loan or your credit’s interest rate, if you have a stellar credit score, you have leverage when it comes to bargaining for the terms you require. You will be the one who calls the shots and gains the most financial benefits from your circumstance.
Better Job Applications
This will require your permission before they can gain access to your credit score. Potential employers tend to check credit scores to see if there are any red flags like bankruptcies, late or skipped payments, and so on. They look for these signs because they can indicate that the person can be irresponsible or not trustworthy. Sometimes, companies ask for credit scores because they fear if the score is low, it may keep you from completing specific tasks of your job. However, if you have a good score, you show that you are a responsible person who has got a hold of their finances and have everything in order.
