How a good credit score can save you thousands

How a good credit score can save you thousands

Your credit score is the most important aspect of your financial life. Without a good credit score, you won’t be able to get any loan or even opt for a decent job. Sounds freaky..isn’t it? Yes, your employer may also check your credit score while appointing you for his/her company.

So, basically, having a good credit score is essential for everyone.

Many of us didn’t know having a good credit score can actually save your thousands of dollars. How? Check out the below-given benefits to get the idea:

a. Lower interest rates on credit cards

One way a good credit score can save a lot of money from your wallet is on credit card interest. A good credit score may help you to get lucrative rates on popular credit cards, which will save a good amount every month on interest if you carry a balance. It is best to pay off your entire balance every month if you want to avoid incurring credit card debts.

This strategy is very helpful to avoid costly interest fees, and also helps to improve your credit scores.

b. Pay less on your mortgage

Good credit scores can help you to save money on your mortgage costs. If you have a good credit score, your mortgage lender may offer you a lower down payment and lower interest rate. For most of the homebuyers, the savings in mortgage interest fees is one of the biggest benefits that a good credit score can give them.

c. Payless insurance premiums

Your credit scores can help you to lower your insurance premium on an auto or homeowner’s policy. In many states, insurers prefer those credit-based insurance scores that can assess the risk of filing claims on your policy. If you have a good credit score, your positive credit activities such as on-time payment may help to get a higher credit-based insurance score. So, technically it’ll lower your insurance premium rates. Negative credit activity, such as a high amount of debt, can badly affect your credit-based insurance score and your insurance premiums can be higher.

d. Good interest rates while taking out student loans

Borrowers, especially students may save as much as $19,000 over the course of their loans by refinancing their federal student loans through private student loans. Normally, if you have a good credit score, private lenders may allow you lower interest rates on student loans. Consumers or students with good income and good credit score may refinance their student loans to lower interest rates. But they must have an excellent credit score to get the best offers with student loan refinancing.

e. Other credit card benefits

The option for savings isn’t always available in form of low monthly payments. Having a good credit score may have lots of other rewards and bonuses. Having a good credit score may give you benefits such as cash back on shopping, or airline miles while traveling if you use a credit card for making the payments. With higher credit scores, you may become eligible for higher bonuses and offers. These rewards and perks may save you hundreds or even thousands of dollars when you are going on a vacation.

So, what are you waiting for? Try as best as you can to build your credit score and refrain yourself from the activities that may harm your score. Good luck.