3 Ways Your Life Can Be Improved With Good Credit
In a recent MyBankTracker survey, it was revealed that 49.7% of millennials don’t own a credit card. And 53% of those aged 18 to 24 said they don’t have a credit card and never applied. While the responsibility of managing credit may seem daunting, it is of the utmost importance to establish credit – good credit at that.
To do so, you must be responsible, never spend above your means, and ALWAYS pay on time. If you keep these three things in mind, you’ll be rewarded for your conscientious money management. Lenders, such as banks and credit card companies, use credit scores to evaluate the risk of lending money to consumers. That’s right. If you use credit effectively, you will be rewarded for your spending. Here are 3 ways your life can be improved with good credit.
Good Credit Improves Your Chances Of Renting A Home
Imagine you are in the process of finalizing renting your dream home–your slice of paradise. It has the spacious granite countertops you love, stainless steel appliances, and a beautiful backyard. You are so close to signing the lease. Then, the landlord asks about your credit. Much like a potential lender (ie bank or credit card company), a landlord will want to take a look at your credit. If you have poor or no credit, it is likely that your landlord will look to sign with another potential buyer or charge you with a higher security deposit. Then, your dream home stays what it was–a dream.
A good credit score also hugely increases your chances of being approved for a mortgage when the time comes to buy a home.
Good Credit Helps You Qualify For The Best Credit Card Deals
When you are first trying to build your credit history and applying for credit cards, it is likely that you will get a credit limit that is lower than you expected. This is because credit card companies have no score to evaluate the risk of giving money to you. However, establishing a history of on-time payments and responsible borrowing with the balance you have will allow your limit to slowly increase. Once you work your limit up and gain a solid credit score, you can use a platform like compare credit to get connected with a wider selection of credit cards that match your financial personality.
Good Credit Grants You Better Car Insurance Rates
If you’ve ever leased a car, you know that credit scores matter. Many U.S. auto insurance companies use credit-based insurance scores to help determine risk when providing insurance quotes. Much like with trying to rent or buy a home, if you have a high credit score, you’ll typically qualify for lower car insurance rates. If you have a lower credit score, auto insurance companies may deem you riskier to insure, and you will be charged a higher rate as a result.
Ultimately, all lenders want to make sure is that based on your credit, you are stable enough and trustworthy enough to loan money to. If you are effectively managing your credit, you can be rewarded by these lenders, and your life can be made simpler.