Everyone loves earning perks, benefits, and bonuses, right? Credit card reward programs, brand loyalty programs, and even grocery store discount cards are built upon this very concept. Yet while most people can easily recognize the value of a credit card rewards program, there are still many consumers who do not see the value of having high credit scores in the same light. That is a costly mistake.
The truth is that great credit scores can help you to land a lot of awesome perks. Check out the list below and learn more about some of the benefits you can enjoy by maximizing your credit scores.
1. Saving with Lower Insurance Premiums
When you have excellent credit scores you can often secure lower insurance premiums. You may not be aware of this fact, but insurance companies routinely check credit scores whenever you apply for a new auto or home insurance policy. In fact, when it comes to auto insurance pricing, your credit scores might even be more influential than your driving record itself.
Earning great credit scores often pays off every single month in the form of money saved on insurance premiums. If your credit has improved since you took out your current insurance policy, it might be advisable to speak with your insurance agent or perhaps shop around to see if you now qualify for a better price on insurance coverage.
2. Saving on Deposits
When you open a new utility account it is often common practice for the utility provider to check your credit in order to determine whether or not you will be required to put down a deposit for service. As a result, when you apply for new electric service, gas service, cable service, or internet service, having less-than-stellar credit scores can cost you. Additionally, when you apply for a new mobile phone account, your credit will typically be consulted not only to determine whether or not you will be required to put down a deposit for service, but also to determine whether or not you qualify for a new account at all.
3. Saving Interest Fees Every Month
Did you know that financing a home with a questionable credit rating could realistically cost you tens of thousands of dollars over the course of the loan? For example, purchasing a home with a credit score of 620 could cause you to pay an extra $235 per month on a $300,000 mortgage compared to what someone with a credit score of 740 would likely pay for the same loan. Over the entire course of a 30 year mortgage that is an extra $84,600 you would pay - a pretty expensive penalty for not having great credit scores.
If you have already overcome credit issues and have rebuilt great credit scores, you should probably take a look at your current loans (i.e. mortgage, auto, credit cards, personal loans, etc.). You might qualify to refinance some of those loans at a lower rate and save yourself a bundle on interest.
4. Saving on Vacations
Having great credit enables you to land better credit card offers. Many credit cards offer exciting perks such as 0% interest on purchases for 12 months, generous airline reward miles which can be redeemed for free airfare, or even 0% financing with a specific resort or cruise line. However, the most attractive credit card offers are generally reserved for those consumers who have excellent credit scores. Achieving excellent credit scores can open the doors for you to cash in on some amazing vacation deals.
5. Saving Face
If you have ever applied for financing in the past and been turned down, you can probably recall a vivid memory of the red hot embarrassment which crept its way up your face when you heard the words, "I'm sorry, but your application was denied." Simply put, bad credit can be very bad for your self esteem and your sense of self worth, especially if you are the primary bread winner for your family. It is well worth the hard work required to build better credit scores just for the pay off of the added confidence you will receive once you know you never again have to worry about being turned down due to credit problems.
Earning Better Credit
It is completely possible to start earning better credit right away. However, just because it is possible does not mean that the process is easy. Earning better credit takes a solid plan, hard work, consistency, and patience. The good news is that the sooner you get started, the sooner you will be able to achieve your goal. It may require some hard work to improve your credit, but the amazing payoffs above make it totally worth the effort.
About the Author: Michelle Black is an author and leading credit expert with over a decade and a half of experience in the credit industry. She specializes in the areas of credit reporting, credit scoring, identity theft, budgeting, and debt eradication. She is featured monthly at credit seminars, podcasts, and in print. You can connect with Michelle on Twitter and Instagram.