The Advantages of a Good Credit Score

According to the Home Buying Institute, millions of Americans have a low or bad credit score. A low credit score can cause many problems for the average consumer, as it can make seemingly simple tasks like borrowing money from a lender or applying for a credit card nearly impossible. Having a good credit score offers many advantages to consumers, and can open up many financial doors and opportunities for those who have it.

Lower Interest Rates

Consumers with high credit scores are generally offered lower annual interest rates on their existing credit cards. This is an extreme advantage for people who use their credit cards on a regular basis for bills or other regular purchases such as gasoline or groceries. A lower interest rate basically translates to more money for less, as you will not be charged nearly as many interest fees as you would with a high interest rate.

Higher Credit Limit

Like lower interest rates, higher credit limits are generally granted to consumers with good credit. This means you will have a higher available balance on your existing credit cards, allowing you to charge more to the card. A higher credit limit can be useful in the event of an emergency or if there is a large purchase that you cannot pay in full at the time.

Easy Access to Loans

Having a good credit score will make applying for an auto, home or personal loan a much easier experience, as lenders are more inclined to loan to you if your credit reflects an excellent payment history. Not only does good credit make it easier to get a loan, it also will lower the interest rates on your loans and increase the money available to you from lenders.

Lower Insurance Rates

Insurance companies take your credit score into consideration when setting your rates, so a good credit score will lower the cost of your auto or home insurance. A lower insurance rate will save you money, giving you the most coverage for the least cost.

Employment

While not all employers will check an applicant's credit history, some may as part of their screening process when deciding who to hire. An applicant with poor credit may not look as responsible to a potential employer as an applicant with good credit. A good credit score will ensure you are not turned down for job opportunities as a result of your credit history.