What Are the Benefits of a Good Credit Score?
Your credit score isn't just a number on paper. It's a door to opportunity, from jobs to credit cards to insurance. And, the higher your score, the wider that door opens.
Presented as a FICO® score or VantageScore®, your credit score calculation is based on several factors in your credit report: length of credit history, amounts owed, new credit, credit mix, and payment history. And, according to myFICO, 90% of lenders use versions of these scores to make lending decisions.
That means that the advantages of good credit factor in to almost every aspect of your life, whether you're hoping to purchase your first car or get approved for a loan to start your small business. Credit veterans and rookies alike have to face the same obstacles, and a good credit score makes it easier to clear those financial hurdles and move forward.
Here's how a high credit score positively impacts your life:
People with a high credit score are more likely to be approved for higher credit lines and loans with lower interest rates, and they have more negotiating power when it comes to getting the financial deal they want. Credit companies see good credit as a sign of trustworthiness and offer cards with significantly lower interest rates, generous credit limits, lucrative introductory deals like 0% APR, and top tier rewards like airline miles or cash back as a result.
Home, Car, and Utilities Costs
The advantages of good credit don't just stop at credit cards and loans. People with great credit scores snag prime mortgage rates when buying a house and are more likely to be approved for that dream apartment, rental home, or vacation rental. The higher your credit score, the less you'll pay in interest on an auto loan. Additionally, car insurance companies pull credit reports to determine your monthly premium. Those with a good credit score can even avoid having to put down a security deposit on utilities as companies can trust that a customer with a higher credit score will be able to make monthly payments on time.
Work & Personal Life
The benefits of a solid credit report and high credit score even factor in to your career and personal ambitions. In some states, employers can check credit reports before making a final offer, so having a positive credit report may signal that you are fiscally responsible and potentially a better prospective employee. Similarly, couples embarking on major financial investments together such as weddings, homes, or children, might struggle to get the loan they need if one person has poor credit.
An important part of building a high credit score is having the right credit card to guide you along the way. When used responsibly, Credit One Bank credit cards offer the tools that can help you pursue opportunities that come from having good credit.