Did you know that credit reporting has been around for almost 200 years?
A credit score is a measure of your creditworthiness, based on information relating to your credit history. If you’ve missed payments on a lot of loans, for example, your credit score is going to be low. On the other hand, if you borrow sensibly and always repay on time, your credit is likely to be high.
A credit score is used by finance companies to determine the level of risk when lending you money or offering you a financial service. Having a good credit score does more than just get you access to loans and insurance. A good credit score could actually make a big difference to your bank account.
Read on to learn how improving your credit score can help you to save money.
Better Interest Rates
Budgeting for a big family isn’t always easy. There are times when you may need to take out a loan for big purchases such as your home, a bigger car, or that dream vacation.
The good news is that with a good credit score, you can save money by getting access to better interest rates. The biggest savings are to be found with mortgages; having a better credit score means you can access mortgages at lower interest rates that can save you tens of thousands of dollars.
Whilst the savings aren’t as huge, you can still make significant savings on loans such as personal loans or car loans with a good credit score.
Better Insurance Premiums
Having a low credit score is something that many insurance companies frown upon. In their eyes, this makes you a higher risk, so your premiums will increase to help them cover that risk.
With a good credit score, you gain access to better insurance premiums which can save you serious money.
Better Credit Card Options
Did you know that using a credit card can actually help you to boost your credit score?
Although it sounds strange, using a credit card sensibly shows that you are able to borrow and repay within your means. Over time, using a credit card and paying it off in full each month could help you to build your credit rating.
The good news is that once you’ve got a good credit score, you gain access to the best credit card offers, many of which include perks such as cashback that can help you to save money.
Better Cell Phone Deals
Where would we be without our smartphones?
We’d all struggle to get by without one these days, but did you know that when you take out a smartphone contract, your credit score will probably be checked? If your credit score is good, you may be able to get a phone with no upfront payments. If your credit score is poor, you’ll probably have to pay a significant deposit, and might not even be able to get a deal at all with some providers.
The Value of Improving Your Credit Score Is Clear
As you can see, improving your credit score can save you a lot of money. The biggest savings can be made on mortgages, but there is plenty of money to be saved in other areas too. Learning how to improve your credit score is a great investment in yourself and can reap serious financial rewards.
If you’re looking for more tips on how to stay creative when it comes to finances, family, health, cooking, and more, then you’re in the right place. Check out the latest blog posts today!