August 13, 2023

Reasons Why Your Credit Score Is Important

Over the course of your lifetime there will be a variety of scenarios where businesses and people will rely on your credit score to help them decide if you’re a good person to do business with and what kinds of rates you deserve. Having a strong credit score can open the door to more opportunities and savings. Here are just a few examples of what a good credit score can help you achieve:

  • Large ticket loans through traditional financial institutions: if you’re looking for larger-sized financing such as a mortgage, auto or small business loan, your first stop may be a bank. Most people spend hours filling out paperwork and collecting information for the long loan application, but one of the key pieces of information that determines whether you qualify for a loan and what rate they can offer you is your credit score. If you know you’ll be in the market soon for a large loan, you’ll want to make sure you’re credit score is in good shape. A good score will help you qualify, and can help you lock in the best rates which can translate to hundreds or thousands in savings.
  • Credit cards: it’s pretty easy to get a credit card, even if you have a poor credit score or no credit history, but your options will likely be limited. With a high credit score, you can qualify for a broader range of credit cards that reward customers with sign up bonuses, cash, and points for other perks, entry to airport lounges, and more. Start building a robust credit history of on-time payments early on so you don’t miss out getting access to the best credit cards and rewards.
  • Car Financing: for most Americans, buying a car is the second largest purchase they’ll make in their lifetime right behind their home. A great credit score can be one of the best tools to help you get a great rate on a car loan. Working towards a strong credit score before you’re in at the car dealership buying a car could help saves you hundreds to thousands of dollars in interest.
  • Online loans: online lenders have emerged as an alternative to traditional financial institutions and are known for leveraging technology and data to deliver quicker loan and rate deaccessioning, and a simple online experience. Online lenders like Upgrade perform soft credit checks to see if you can be pre-approved for a personal loan. A strong credit score can give you more options and better interest rates with online lenders.
  • Insurance: a healthy credit score and credit history can often help you get a more affordable insurance premium compared to others with an average or poor credit score. Why? Insurance providers are looking for information that helps them evaluate an applicants’ risk and the probability that they will become delinquent on their insurance payments. Your credit score is a way to evaluate risk and create a policy and premium at a fee that lines up with the risk level they determine. An excellent credit score can help you qualify for the best insurance policy at a great rate – giving you and your loved ones peace of mind.
  • Cell Phone Service: one of the first steps that cell phone service providers take when deciding whether to offer you cellular service is to checking your credit history. If your credit score doesn’t meet their standards, they may ask you for a down payment, give you a smaller selection of phones to choose from, or not offer you the latest promotional rates or rewards. It’s hard for most of us to imagine life without a cell phone – don’t let your credit score stand in the way.
  • Keys to your apartment: many landlords require running a credit check in addition to completing an apartment application. A solid credit score could give you a step up from other apartment seekers in a competitive market.

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