Does a “Good” Credit Score Matter Anymore?

smart-credit-habits

You’ve heard the importance of having a “good” credit score before. You pay your bills on time and practice smart credit habits to keep your score in tip-top shape!

So, what does a “good” credit score actually mean? Well, there are many financial benefits to a solid credit score. Here are a few things a great credit score can do for you, and some motivation to improve it!

Better Chance of Approval

While a greater credit score might not automatically guarantee your loan approval, it can certainly help your chances. A higher score will stand out on your mortgage, credit card, and loan applications, and can even increase your chances of landing that deam apartment you applied for!

Lower Interest Rates

An interest rate is the amount you will be charged for taking out a loan. When you apply for a loan, a lender will review your credit score to see your “creditworthiness” – or how likely you will be to repay the loan. Typically, the higher your score, the more trustworthy you look. This can result in a lower interest rate which can mean saving thousands of dollars over the lifetime of the loan.

Higher Spending Limit

The amount a bank will allow you to borrow will, again, depend on your “creditworthiness.” Along with your income, if your credit score shows that you’re a responsible borrower, banks will be more likely to lend you larger amounts of money, which increases your purchasing power. Your higher spending limit can make it easier to purchase larger items but be careful, this can also be a double-edged sword!

Negotiating Power

A “good” credit score puts you in a strong position to negotiate your way to an even lower interest rate or further increase your purchasing power. You may be able to get the terms you want and deserve just by showing the lender how trustworthy you are as a borrower. You worked hard for your credit score, consider using it to your advantage. It can save you money in the long run!

More Rewards

If you’re into credit cards that offer cash back, travel perks, points, and gifts, you’re going to want a high credit score. While many credit card companies may offer these rewards, the better your score, the better the rewards can be. As great as rewards can be, just remember that some may come with a catch. You may be required to spend a certain amount before you’re able to benefit from your card. Also look into the fine print when it comes to these types of rewards cards to make sure they aren’t “too good to be true”.

So, does a “good” credit score really matter anymore? We still think so! There are many reasons why it’s important to maintain a respectable credit score. Although you may not need a perfect 850 to get the best perks, a high credit score will save you money and can improve your overall financial situation. Is your credit score a high level of importance to you? What are some other ways a “good” credit score can help you? Feel free to leave your comments below!

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