How Your Credit Score Affects Your Life
Written on Jan 13,2022 by Joe Mahlow
Wondering how (or if) this so-called thing called a “credit score” has any impact on your daily life? Unfortunately, credit scores are a very real thing that do indeed affect areas of your life and any changes you might wish to make. The benefits of a good credit score reach beyond simple debt. Read on to find out exactly what is up when your credit score is down.
- Purchasing a house.
A credit score affects your ability to qualify for a mortgage, therefore a house. You have a few different versions of credit scores that can be reviewed, but mortgage lenders tend to use an older version of the FICO Score. The ranges are mostly the same and, even if you qualify for the loan, you still will get a better deal on the interest rate by having a higher score.
- Better interest rates.
Pending application approval, your loan/credit card interest rate is influenced by your credit score. The higher the score, the more likely you are to both be approved and receive a lower rate. Keep in mind that other factors (i.e., income, credit history, etc.) can also impact your rate.
Many landlords and property management companies will want to review your credit before agreeing to rent you an apartment or home. Having poor credit can make it difficult to get approved, or may lead to a larger security deposit requirement, while excellent credit could make your application shine.
Refinancing a loan means you qualify for a new loan and will use the proceeds to pay off your current debt. It can allow you to save money and/or lower monthly payments. Personal loans also allow you to consolidate and refinance higher credit card debt. The better your credit, the likelier you’ll be approved for a low-rate loan.
- Buying a car.
Even though auto loans are secured by the vehicle you’re looking to purchase, auto lenders will still check your credit to determine your eligibility and rates. Having good to excellent credit could help you qualify for the lowest-rate auto loans. It could also help you qualify for special financing offers, such as 0% interest during a promotional period.
- Setting up utilities.
Utility companies, including gas, water and power providers, may check your credit before opening a new account for you. If you have poor credit, you may have to pay a security deposit to open an account and get your utilities switched on. Having good or excellent credit can make the entire process easier and cheaper. And an easier time with your utilities company does not go unappreciated.
- Paying for insurance.
Insurance companies may use a credit-based insurance score to help determine your premiums. While these scores differ from consumer credit scores, they’re based on your credit history, and having a long history of paying your bills on time could help you qualify for lower premiums.
If you want to have a credit score that is beneficial and works for you, but you’re not sure where to get started at, go ahead and give ASAP Credit Repair a call. We’ll get you headed in the right direction to living life with credit ease.