What can your credit score do for you?

You can survive with bad credit, but it’s not always easy and definitely not cheap. Having a good credit score will help you save money and make your life much easier. If you’re looking for inspiration to improve your credit score or reasons that you should maintain your good credit, here are some great benefits to having a good credit score.

Low interest rates on credit cards and loans.

The interest rate is one of the costs you pay for borrowing money and, often, the interest rate you get is directly tied to your credit score. If you have a good credit score, you’ll almost always qualify for the best interest rates and you’ll pay lower finance charges on credit card balances and loans. The less money you pay on interest, the more you have for everything else including repaying your balance.

Better chance for credit card and loan approval.

With a shaky credit history, you’ll probably avoid making new credit card or loan applications because you fear you’ll be turned down. Having an excellent credit score doesn’t guarantee approval – because lenders still consider other factors like your income and debt – but it does give you a very good chance of being approved. When you decide to apply for a credit card or loan, you can do it with confidence.

More negotiating power.

A good credit score gives you leverage to negotiate a lower interest rate on your credit card or a new loan. If you need more bargaining power, you can refer to great offers you’ve received from other companies based on your credit score. However, if you have a low credit score, creditors typically won’t budge on loan terms and you may not have the freedom to shop around.

Get approved for higher limits.

Your borrowing capacity is based on your income and your credit score. One of the benefits of having a good credit score is that banks are willing to let you borrow more money because you’ve demonstrated that you pay back what you borrow on time. You can still get approved for some loans with a bad credit score, but the amount will be limited.