A good credit score is important for a lot of reasons. If you’re looking to buy a car, your credit score will play a big role in whether or not you’re approved for a loan and what interest rate you’ll be offered. A low credit score can also affect your ability to rent an apartment or get a cell phone plan. Here are six more reasons why you should make improving your credit score a priority.
1. Save money on interest payments
If you have a good credit score, you’ll likely be offered lower interest rates on loans, which will save you money over time. For example, let’s say you’re taking out a $10,000 loan with a 5% interest rate. If your credit score is excellent, you may be offered a 3% interest rate instead. Over the life of the loan, that would save you $500 in interest payments. Many lenders have a minimum credit score for car or personal loans in Australia, meaning it’s important to keep on top of yours.
2. Avoid rejected loan applications
A low credit score can cause your loan application to be rejected outright. This can be very frustrating if you’ve been looking forward to making a major purchase, like a home or a new car.
3. Get approved for better credit cards
Credit card companies use your credit score to decide which cards you’re eligible for and what terms they’ll offer you. If you have good credit, you may be able to get approved for cards with great rewards programs and low-interest rates. On the other hand, if your credit score is poor, you may only be able to get approved for cards with high fees and low limits.
4. Avoid deposit fees
When you have bad credit, some companies may require you to pay a deposit before they provide services like electricity, internet, or cell phone service. These deposits can range from $100 to $500 or more depending on the company and how bad your credit is.
5. Get lower insurance rates
Your credit score is one of many factors insurers take into consideration when calculating your premium. So if you have good credit, you could end up paying significantly less for car insurance than someone with bad credit who poses the same risk to the insurer.
6. Improve your job prospects
More and more employers are pulling job applicants’ credit reports as part of their hiring processes. They do this because they believe that people with good financial habits are more responsible and reliable employees. So if your credit score isn’t where it should be, it could stand in the way of getting your dream job.
As you can see, there are many good reasons to make improving your credit score a priority. A higher credit score will save you money, help you get approved for loans and credit cards with better terms, avoid deposit fees, get lower insurance premiums , and improve your job prospects. So if your credit score isn’t where it should be, start working on it today! It’s worth it in the long run.