Bad credit isn’t the worst thing in the world, but it can make life more difficult and more expensive. Having a great credit score saves you money in a number of ways, making your life happier and less stressful.
Learn more about the 10 ways good credit saves you money and sets you up for a solid financial future.
Lower Interest Rates on Loans and Credit Cards
If you apply for a loan or a credit card with bad credit, the interest rate will most likely be higher. Having good credit means you’ll not only get a better interest rate, but you’ll also have access to more options with competitive rates and lower finance charges. On top of that, the less money you pay in interest, the less your purchase costs you in the long run.
Better Loan and Credit Card Approvals
With a bad credit history, you may avoid applying for loans and new credit cards because you’re likely to be turned down and don’t need another hit on your credit report from an inquiry. While having good credit doesn’t guarantee approval, it will give you a better chance of getting approved. If you’re looking to apply for credit card or loan, be sure that your other factors, such as timely payments, are also good.
A good credit score gives you automatic leverage when negotiating a lower interest rate on your loan or credit card. If you need bargaining power, you can always show the creditor the other competitive offers you received for your great credit score. With a low credit score, however, the creditors have the leverage, so you’re stuck with whatever terms they offer if you want to get the loan or credit card.
Higher Credit Limits
How much credit you’re offered is based on your income and credit score, so if you have a good credit score, banks and lenders are more willing to extend you more money. They have more confidence you’ll be able to pay it back. You may still get approved for higher limits with bad credit, but you won’t be offered nearly as much.
Approval for Rentals
Landlords often use credit scores to screen tenants and gauge their ability to pay their rent in full and on time. A bad credit score, especially one that came from an outstanding rent debt or an eviction, can hurt your chances to get an apartment. A good credit score not only gives you a better chance of getting an apartment, but it also gives you a wider range of rentals to choose from.
Better Auto Insurance Rates
Auto insurance also uses credit scores to determine your rate, since there’s statistical evidence that individuals with bad credit are more likely to file claims. Because of this, insurance companies check credit scores and penalize individuals with bad credit by giving them a higher premium to offset potential claims in the future. With good credit, you’ll save on your insurance premium and pay less over time than a similar applicant with bad credit.
No Contracts or Security Deposits for Cell Phones
Cell phone providers may also deny you a contract if you have bad credit, leaving you with only pay-as-you-go-plans with more expensive monthly payments and phones. Those with good credit enjoy a cell phone contract with no security deposit and hundreds of dollars in discounts on the newest phones with their yearly contract agreements.
No Security Deposits on Utilities
Utilities, such as electric, water and heat to for home, often include a security deposit of a few hundred dollars to turn on service. Some companies also charge you more each month, since they’re expecting you to miss a payment or two. This is not only a huge inconvenience if you’re moving, but it can also create a problem if you have a natural disaster or some other extenuating circumstance that requires you to relocate. A good credit score eliminates the security deposit, so you can easily have utility services activated or transferred in your new home or apartment.
Options for Paying Off Debt
If you have bad credit, you may have to stay locked in with a credit card with high fees and high interest rates. Good credit gives you more options to pay off your debt faster, such as negotiating with your credit card company for a lower interest rate or waived fees. Balance transfer cards are also an option, which often allow you to move your existing debt onto a new card with a lower interest, and for some, even an introductory period of zero interest on transfers.
Get Help From Koster Cash Loans
As you can see, good credit comes with many perks and savings that help you stay on track with your finances and build a solid financial future. It also has some bragging rights, since a good credit score indicates that you’ve been responsible and trustworthy with your borrowing.
Unfortunately, it can be difficult to get your credit score up while you’re struggling to pay off existing debt and high interest rates that only put you more behind. Because of this, getting your credit score up can feel like an uphill battle every step of the way.
Would a lump sum help you get a fresh start for your credit? If you’re struggling with bad credit, consider a cash loan from Koster Cash Loans. We offer installment loans with fast approval and payout, so you can get the money you need, when you need it. We understand that financial disasters can creep up out of nowhere and can be difficult to recover from, which is why we offer flexible options to help you keep your finances on track. To get started, simply fill out our quick, secure online application and get on the road to financial freedom!