If I could go back in time and give a piece of wisdom to my younger self, it would most definitely be about credit score! Generally we are not taught it in school, college or even university, which when you take a second to think about that…is ridiculous. It’s not only until we get old enough and we need a loan, or want to take out a new phone contract; we are shamefully rejected because our credit score isn’t up to scratch.
If you haven’t read my post about 5 easy steps to improve your credit rating, you can see it here! In this article I’m going to layout 5 awesome benefits you have with a good credit score. Hopefully it’ll give you motivation to use those 5 easy steps to improve it.
1. Give a Good First Impression
You shouldn’t see your credit score as just a number. You should see it as the nice clothes you wear to your job interview, or the way you present yourself at an important meeting with a new client.
When applying for loans, mortgages, phone contracts, insurance and many other wonderful things, companies will check your credit score to determine if you are a low-risk client. The higher your score, the better you look. Imagine going to a job interview in your pj’s, that is basically what you’re doing when applying for things like loans with a bad credit score (unless the job’s uniform requires you to wear pj’s).
2. More Negotiating Power
Having a better score will give you more leverage to negotiate lower interest rates on a credit card or new loan. With a good credit score you’re an attractive client, companies will have some reassurance that they don’t need to worry about you repaying what you borrow, meaning you have the power to get a loan or mortgage which is more suited to what you need!
With a low credit score, creditors are very unlikely to budge on any terms they have set out for the loan or mortgage they’re offering. And that’s assuming you’ve even got as far as speaking directly with the company, it’s difficult to even get your foot in the door with a bad credit score (hey that rhymed).
3. Cheaper Car Insurance
This is one of the more surprising benefits that is usually overlooked. If you have a higher credit score, you are more likely to be offered cheaper car insurance (and we all know how expensive it can potentially be!).
As driving a car has many risk factors involved, insurance companies consider risk very carefully when determining how much coverage you require. This is why they take your credit score into account, the higher risk you are, the more expensive your monthly payments will be.
You can never be denied car insurance purely based on your credit score, even if it is very low. However it can greatly increase the monthly fee of your insurance.
4. Job Applications
This doesn’t stand for every job you apply for, but some companies may ask for your permission to run a credit check before they consider employing you. This mainly applies to jobs that involve managing money or a high stress job. They want to make sure your financial behaviour won’t have an impact on your performance at work.
An employer could even deny you are position in their business if you have a bad credit score, even if you fit the job description 100%. They could feel that your current financial situation will affect the way in which you would perform the job you are applying for. And this links back to good first impressions! Walking into an interview knowing that they’ve checked your credit score and it’s probably wowed them, will give you the confidence you need to nail the interview and get the job 🙂
5. Peace of Mind
At Contractor Friendly Mortgages, we take peace of mind very seriously. When trying to get a mortgage, or a loan, or anything to do with your finances, not having peace of mind can make it a daunting and horrible experience.
When you’ve got a good credit score, you can manage your money easier and go through your financial applications with confidence. Don’t underestimate the advantage of a good credit score, it’s a very powerful tool to have under your belt!