Your credit score is one of the most important numbers in your financial life. A high credit score means you can get a lower interest rate on a mortgage or car loan, and it could even mean a lower insurance premium.
But what many people don't know is having a high credit score can also save you money in other ways. We'll discuss these in detail, as well as factors that affect auto insurance rates.
#1 - You'll Pay Less for Car Insurance With a High Credit Score
Having a high credit score can save you money on car insurance. Car insurers typically charge higher rates to drivers with poor credit scores, as they are seen as a greater risk. In contrast, drivers with high credit scores are seen as low-risk and are therefore offered lower rates.
If you're looking for ways to save money on car insurance, one of the best things you can do is to work on improving your credit score. While there are companies who offer insurance for bad credit, keeping your credit rating in good shape can help you pocket hundreds of dollars in savings each year on your car insurance premiums.
#2 - Lower Rates on Other Types of Loans
A good credit score can save you a significant amount of money over the life of the loan and make it easier to get approved for a loan in the first place. This can be especially helpful if you're in need of a large sum of money, such as for a home or business purchase.
You'll pay less in interest on the loan because, with a high credit score, you're seen as a very creditworthy borrower.
It can also help you to establish a good credit history. This can be useful down the road if you ever need to take out another loan or apply for a credit card. All in all, having a high credit score is definitely beneficial for anyone looking to borrow money.
#3 - Higher Credit Limit
A high credit limit can be a great asset for anyone trying to get their finances in order. Not only does it mean you can borrow more money in the event of an emergency, but it also means you will end up paying less interest on your debts.
In order to qualify for a higher credit limit, you will need to have a good credit score and a healthy credit history. You should also make sure you are using no more than 30% of your available credit limit. If you can meet these requirements, your bank is likely to be willing to raise your limit.
Having a high credit limit can help you to spend less money on interest payments, and it can also give you greater peace of mind in the event of an emergency. This is a great reason to try and boost your credit score quickly.
#4 - Lower Cell Phone Bill
Having a good credit score can help you get promotional rates on your cell phone plan. Cell phone providers generally look at your credit score when determining if they should offer you any special discounts or promotions. If your credit score is high, this could result in lower monthly payments and even free data as part of the promotional package.
Additionally, companies may offer you better plans or additional features if they know that you have a good credit score. This means that you may be able to find cell phone packages with lower prices, more data and free extras with a high credit score.
Make sure to research different cell phone companies and read the fine print of any promotional offers before signing up for something you may not be able to afford. At the end of the day, having a good credit score can help you save money on your cell phone plan and other areas of your financial life.
#5 - Promotional Deals on TV and Cable
Having a good credit score can lead to savings on your cable and satellite TV bills. Companies may offer promotional rates for customers with higher credit scores, or they may be more likely to approve you for certain plans that are otherwise unavailable to those with lower scores.
It can also mean access to better deals on equipment such as digital video recorders, special receivers, and HD TV sets. So, by improving or repairing your credit score you could save some money on your cable or satellite television bill.
How to Be More Credit Score Savvy
Being credit score savvy can help you save money, get better deals on loans, and enjoy more financial freedom. Let's go over some tips for improving your credit score.
Pay Your Bills On Time
A payment history that is free from late payments is key to having a good credit score. Make sure to pay your bills before their due date every month, and set up automatic payments if necessary.
Check Your Credit Report Regularly
A credit report contains key information about your financial history, so it's important to review it regularly. Checking your credit report allows you to stay on top of any mistakes or fraudulent activity that may be affecting your score.
Lower Your Debt-to-Income Ratio
Lenders look at how much debt you have compared to your income when considering loan applications. Make sure to keep this ratio as low as possible by paying down debts and avoiding taking on new ones whenever possible.
Avoid Closing Old Credit Cards
While closing an unused card can help with managing finances, it can also hurt your credit score. Unused cards are considered a positive factor in determining your score, so try to keep them open unless there is a compelling reason to close one.
Use Credit Cards Responsibly
Using credit cards responsibly can help improve your credit score by demonstrating that you don't overspend and can manage debt effectively. Try not to carry a balance from month-to-month, and always make sure to pay bills on time.
By following these tips, you can be better equipped to manage your finances and enjoy the benefits of having a good credit score.
Enjoy the Benefits of Your High Credit Score
Having a good credit score can help you save money in many different ways. It can open the door to lower interest rates on loans, better deals on cell phone plans and cable/satellite TV bills, and more.
A good credit score also demonstrates that you are capable of managing your finances responsibly, which is an important factor when applying for new loans or other financial products.
By taking steps to improve or maintain your credit score, you can enjoy the many benefits it provides. So make sure to check your credit report regularly, use credit cards responsibly and pay off debt as quickly as possible to take advantage of all that a good credit score has to offer.
Luke Williams writes and researches for the auto insurance comparison site, AutoInsurance.org. His passions include insurance and helping others build good credit.