If you’re working on building your credit, you hear a lot about credit scores. And you probably know that having a high credit score is better than having a low one.
But do you ever wonder, “Why are credit scores important, anyway?”
Lenders, credit companies and other businesses may check your credit score when you apply for credit or services.
Your credit score is partly based on your credit history, which shows how you’ve made payments in the past.
They may be more willing to give you credit or approve you for a loan if you have a high credit score.
Here are 5 ways a good credit score can help you.
1. renting an apartment or house
Landlords may check your credit score to decide if you’re a good candidate for renting a property. A higher credit score could make it easier to get approved for the place you want.
2. applying for a loan or credit account
A good credit score can make it easier and faster to get approved for a loan or credit account. It can also help you qualify for a lower interest rate, which can save you lots of money on interest charges.
If you apply for a credit account, a better credit score can lead to a higher credit limit.1
3. getting a mortgage
Like other loans, a good credit score can make it easier to get approved for a mortgage.
Just as important, it can help you get a lower interest rate, which can save you thousands of dollars over the course of a typical 30-year mortgage.
4. buying an insurance policy
If you’re shopping for car or home insurance, a good credit score can help you get approved for coverage. You might also qualify for lower premiums.
5. getting a cell phone contract or utilities
Cell phone companies may check your credit score to decide whether to sell you their services.
When you apply for utilities, a higher credit score could make it easier to get services without having to pay a deposit.2
Now that you know why a good credit score is important, you might ask, “how can I get a better credit score?” Get started by checking out these two blog articles:
8 tips for building or rebuilding credit
https://blog.fingerhut.com/eight-tips-for-people-who-want-to-build-or-rebuild-credit/
top 8 myths about your credit score
https://blog.fingerhut.com/top-eight-myths-about-your-credit-score/
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