Being indebted is something that we all loathe. The fact that we are in a financial mess and can’t get our act together is something that feels really bad. While getting in bad debt is usually a consequence of the bad decisions we make, getting out of it requires commitment and financial discipline. Seeking for a loan and being turned down when you badly want the same is a nightmare for most us. It probably explains why having a good credit score is essential in every aspect. This piece is for those people who might be wondering why it’s essential to have a good credit score. I mean, what are the benefits of having a good credit score?
- High credit score helps in getting great insurance rates
Bluntly put, the higher your score is, the less insurance companies see you as a risk and view you as someone reliable to make premium payments timely. If you have a bad score, chances are that insurance companies will charge you slightly higher premiums on your life insurance, auto insurance or homeowners insurance. The argument is that individuals with high credit rating are statistically more inclined to be safe drivers, live relatively long and are safe homeowners.
- Credit provides you with a great buyer protection
Using your credit card to make purchases provides you with buyer protection against identity theft, fraud and other problems that come with using cash for purchases. The cards are safe and you don’t have to worry about being mugged and losing your cash. Also, timely payment of credit card bills work in your favor in so far as high credit rating is concerned.
- A good score improves your chances of employment
Strange? Well, not really. Majority of employers nowadays tend to run credit checks on their prospective employees. Employers are likely to hire individuals whose score is good as it’s an indication that they are reliable and trustworthy. That said, if you have a poor score, it could be the reason you missed out on that job you applied for recently.
- Good score is instrumental with renting
There are people who avoid getting credit and decide to rent until such a time when they have enough to write a check and buy their own home from their savings. While this is a good thing, the same cannot be said of renting a house. Landlords tend to check the credit rating of their potential tenants before renting houses to them. This is particularly true of landlords who own high end apartments or flats. As such, if you have no credit rating or a poor score, chances are that you will be charged high deposit or you will be rejected by your landlord all together.
To sum it up, having a good credit score is a good thing after all. However, the idea should be to have debt that you can effectively manage rather than committing yourself to debt you can’t afford to pay on time. After all, the benefits of having a good credit rating are immense.