You know that your credit score is important, but you might not know exactly how important it is. Your credit score affects more than just your ability to get credit cards — it affects everything from getting a better apartment rental to potentially qualifying for a new job.
1. You Get Better Loan and Credit Card Rates
You might think that having a passing credit score and being able to procure a loan or a credit card is “good enough,” but rates will still come into play. Getting even a single percentage point knocked off your interest rate could mean saving thousands (or even tens of thousands) of dollars on a large, small business or home loan. And it goes without saying that you’ll also get bigger loans and credit lines with a better credit score.
2. You Show That You’re a Responsible Individual
A credit score isn’t just used when lending. Credit reports are often pulled by anyone from landlords to potential employers. They want to see that you can be a responsible individual, and if you have no credit score (or a poor credit score), you may be denied for a rental property or even a job. Many employers believe individuals who have poor financial situations could be more likely to steal!
3. You Have an Emergency Buffer
Have you ever had a medical emergency or other sudden expenditure? If you have a good credit score, you can easily procure a line of credit last minute to make sure that you are taken care of. If you don’t, you could find yourself taking out a costly payday loan or not being able to address a critical situation. By having a good credit score, you have peace of mind knowing that you always have options — even if you don’t necessarily want to procure more credit just yet.Your credit score will shape your financial future for your entire adult life, so it’s important to maintain and improve it whenever possible. For more information about your credit score and how it affects you, contact FMT Advisory, leaders in the personal finance and investment industry.personnel