6 Ways a Good Credit Score Saves You Money
There’s no getting around it — having good credit pays off. Your credit score is more than just a number, it determines whether you’ll be approved for a loan, what interest rates you get, and helps you save money on a long list of life expenses. But just how much could you save for having a good credit score?
Here are six ways a good credit score not only saves you money, but also makes your life easier.
1. Borrow money at a better interest rate
If you’re looking to get an auto loan, remodel your home, or start a business, a good credit score can help you qualify for lower interest rates on nearly any personal loan you need. According to Experian, borrowers with high credit scores can receive APRs on personal loans that are up to 10 percentage points lower than those with poor credit. This difference can mean saving thousands over the life of a loan.
To get an idea of where you stand with your credit, click here to get a free online credit assessment from Lexington Law. (Don’t worry, this is secure and won’t hurt your credit score.)
2. Lower interest rates on a mortgage
If you’re in the market to buy a home, having a good credit score could save you over 1% in interest on a mortgage. This can translate to saving at least $200 per month over the lifetime of a 30-year mortgage on a $300,000 house.
3. Get the best rates on car and homeowners insurance
Having a good credit score can help you save money on your car insurance premiums. According to the Insurance Information Institute, people with good credit can save up to 20% compared to those with lower credit scores. In most U.S. states, insurance companies can use credit-based insurance scores to help determine your risk level. Nationwide uses credit-based scoring to assess driver risk and claims that it often results in lower premiums for about half of their customers — leading to significant savings for many policyholders.
4. Qualify for the best credit card deals
A higher credit score opens doors to premium credit cards that offer better rewards, cash back, and other perks, like free travel insurance and concierge services. These benefits not only help you save money but also encourage consistent credit card use, which can boost your credit score if you pay on time and maintain low balances. Again, potentially saving you money in the long run.
5. Get a new cell phone at a lower rate
Upgrading to a new smartphone can be pricey, but having a strong credit score can make it much more affordable. For example, Apple provides financing options for new phones through their own credit card or a loan from Citizens One Bank, both at 0% interest. Keep in mind that both the credit card and the loan require a credit check for approval.
6. Skip security deposits for utility bills
Most utility companies typically require security deposits when setting up services, but with a good credit score, you might not have to pay these deposits at all. This can lead to savings right from the start of a service contract, making monthly budgeting easier.
Is your credit score holding you back?
One in five credit reports in America contains errors or inaccurate information. These errors can impact your credit score, potentially leading to higher interest rates or even loan denials. If you've recently been denied a loan or credit card, it's possible that incorrect information on your credit report is to blame.
Regularly checking your credit report and disputing any errors can help ensure your credit information is accurate. Let Lexington Law Firm Help you identify and correct inaccuracies so you can achieve the credit score you deserve.
Get a free credit assessment here »
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