We’re told all the time that our credit score is important to your financial health.
Your credit score has a huge impact on some of life’s biggest financial experiences, since a good credit score gives you more options, better terms and bigger savings.
The following are 3 examples of when your credit score has an immediate impact on your personal finances.
Financing a Car Purchase
When buying an automobile, there are typically three criteria that help determine what type of auto loan you will get. They include:
- How much money do you have to put down as a down payment?
- What is the length of the loan you want?
- What is your credit score?
In crunching the numbers, an auto loan of $10,000 for a duration of 60 months for a borrower with a low credit score will cost nearly $4,000 more in interest charges than an auto loan for someone with a higher credit score. As you can see, it literally pays to have a better credit score.
If you have a less-than-stellar credit score, not all is lost. There are plenty of lenders who help borrowers with poor credit, bad credit, and no credit. These lenders can help get you back on track to having a better credit score by making your payments on time.
Renting an Apartment or House
Though there are no official credit score requirements to rent an apartment or house, the higher your credit score, the better your housing options.
A competitive credit score can give a renter the edge need to out compete other applicants or take full advantage of promotional offers, like low down first month payments for qualifying applicants.
Rental markets can be competitive, especially in large cities where many owners of multi-unit apartment buildings have a minimum score requirement to rent within their community.
For those with a lower credit score and have a hard time getting your rental application approved, renting from a private landlord might be a better solution, as some individual landlords have much less strict criteria for renting from them and are better able to use social interaction and life experiences to fully determine if they wish to rent to you.
Purchasing a High Ticket Item
Whether you are in the market for a recreational vehicle, an all-terrain vehicle, upgrade your home with a new kitchen or bathroom, or want to fund a family vacation, taking out a loan to fund these items will require a peek at your credit score.
As you might imagine, having a better credit score lends better opportunities for a wider range of loans, with better rates. However, some lenders will help borrowers of all credit scores realize the opportunity to purchase that big ticket item.
The bottom line is this, be sure to make your payments on time, and keep your credit score in good shape. You never know when you might need your credit score to help you realize your high ticket purchase.