There are certain important numbers in life that you will never forget. You almost certainly know your age, your social security number, and your PIN. One number that can have a huge impact on your life is your credit score, but you may not pay enough attention to it.
If you are adding “check credit score” to your to-do list right now, you are probably one of the many people who do not know if their number is good or bad. You may be wondering if it even matters. The answer is that it does. Here are seven reasons why.
1. Obtaining Waivers on Down Payments
When you need to finance a large purchase, the financier may ask you to make a down payment. This protects the company if you decide to skip out on the rest of the bill. When you have a high score, businesses know that you are trustworthy and have a track record of making payments. Knowing this, businesses may waive a down payment requirement.
You might also have a chance to convince a business to waive security deposits in certain cases, such as hooking up utilities when you move.
2. Finding Better Housing
When you apply to rent a home or apartment, the landlord will often run a credit check to determine if you are someone they can trust to make payments. A good record will give you better rental options because landlords will have a quantitative measure of your reliability. A better number can literally open doors for you.
3. Getting Your Dream Job
With your permission, potential employers can check your credit reports during the application process. Some employers do this because they believe your level of financial responsibility is an indication of your dependability. Poor credit could cause you to miss out on your dream job.
4. Accessing Better Interest Rates
Your score also impacts how much it will cost you to borrow money. Banks and other lenders offer lower interest rates to people with better credit histories. A lower interest rate will result in you paying less back to your lender over the life of the loan.
5. Receiving a Business Loan
For a new or small business, a business loan can be crucial to the success of your venture. If lenders do not feel your company has enough history, they may use your personal credit score to determine if they can safely lend to your business. In this case, a high number may be essential to obtaining a loan.
6. Saving Money on Car and Home Insurance
Businesses want to do business with people they can count on, so they often extend deals to people with good records of timely payments. Insurance companies commonly offer discounted rates for people with reliable credit history. A better score can help you save money on your car, home, rental, or business insurance.
7. Accessing Better Rewards
Some of the most coveted credit cards come with significant rewards that can help you save money or obtain other benefits, like hotel points or airline miles, but these cards are not available to just anyone. If you want to access cards that have the best rewards, you will need a good score as proof that you will make your payments on time.
Your credit score may just seem like an arbitrary number, but it is much more than that. It is the primary measure that many businesses use to judge your reliability and trustworthiness. If you are looking to save money, become an entrepreneur, finance a big purchase, or move to a new home, make sure to check in on your credit score first.