In today’s world, credit means everything! It is a simple three-digit number, but our credit score is used to tell lenders so much about us. Our credit report is our resume to prove credibility. Often, we don’t think about credit until we need it and that can be too late for many people.
It’s very important for us to pay attention to our credit, BEFORE we need it. Here are 7 reasons why we need good credit:
1) Better Interest Rates
Having good credit can save you thousands and thousands of dollars in interest. Whether it’s with your auto loan, home loan, personal loans, or your credit cards.
2) Buying a House
Your credit score not only determines if you even get approved for a home loan, but it also determines your interest rate, the amount of home you are approved for and your mortgage payments.
3) Negotiating Power & No Down Payments
Imagine walking into a car dealership and having all the negotiating power and leaving with the exact car you want, at the exact price you wanted to pay, and not paying a down payment. This is what happens to people with good credit. No more getting fooled by the car salesperson, you have all the power.
4) Higher Credit Limits = Emergency Funds
Having at least $10,000 in available credit is a must. It is a safety net for you and your family. It is an emergency fund if something happens that you can’t afford right away.
5) Unsecured Credit Cards
Unsecured credit cards mean you do not have to put a deposit for your credit card. This means the bank is trusting you with a given amount of credit.
6) Better Credit Card Rewards
Having good credit gives you access to the best credit cards and credit card rewards. Rewards can range from cash back to airline miles and many times they come with other benefits like airport lounge access for you and your family, huge discounts, and amazing sign-up bonuses.
7) Confidence & Bragging Rights
The confidence that comes with good credit stems from the relief of knowing that if an emergency arises, you have a way to handle it financially. It also gives you bragging rights with your close friends and family members. Start a credit challenge between you and your siblings and see who wins!
With so much emphasis placed on good credit, it is imperative a person knows how to raise their credit score. With a good credit score, which is typically defined as a score above at least 650, moderate interest rates on credit cards and loans are offered. This can save a great deal of money in the long run.