7 Secret Perks of Having a High Credit Score
Written by
Adam Palasciano
Edited by
Nicholas Morine
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
In an economy highlighted by sky-high interest rates for auto and home loans, having a good credit score has probably never mattered more.
According to the Consumer Financial Protection Bureau, a credit score is a prediction of your credit behavior, such as how likely you are to pay a loan back on time, based on information from your credit reports.
If your credit score is lacking, you might want to consider ways to boost it as soon as you can. Why? Because having a high credit score comes with some sweet financial perks.
Best Perks of Having a High Credit Score
Here are seven secret perks of having a high credit score, according to RedRoofRipon and Equifax:
- Access to lower interest rates: A high credit score will translate into favorable interest rates on auto loans and mortgages. If you’re in the market for a new car or to buy your first home, the status of your credit score is the first thing you’ll want to be concerned about. Even a difference of just 1% can save you thousands (if not tens of thousands) of dollars over the life of a sizable loan.
- More favorable loan terms: A high credit score can also mean more favorable loan terms. These can be lower down payment requirements and extended repayment periods, depending on what your lender offers.
- Higher credit limits: Since a higher credit score shows that you’re more likely to pay back your loans without an issue, some financial institutions and lenders will be glad to offer you higher credit limits. This can be for an auto loan or mortgage — or even a higher spending limit on your credit card.
- More likely to be approved For rentals: Renting an apartment comes with certain financial approvals from the landlord. To guarantee you’ll be a responsible paying tenant for the duration of a lease, landlords will often run credit checks before you can sign. The higher your credit score, the more likely you’ll be approved to move in.
- Loans can be approved faster: Sometimes, a higher credit score means you won’t have to wait very long for your loan or credit card application to be approved. Since a higher score is indicative of your ability to pay your bills on time and in full, there usually isn’t a need for the lender to take a closer look at your finances before approving.
- Access to higher level credit cards: The credit card market has become so saturated in recent years. There’s an endless variety of credit cards to choose from, however, certain higher-level rewards cards are usually reserved for those with “excellent” credit (800 and above). Having a higher credit score means you’ll have access to a wider variety of credit cards.
- Lower insurance rates: An even lesser-known perk of having a high credit score is that you could qualify for lower auto insurance premiums in some states. So, not only can a high credit score save you money on interest, but it can also save you money on necessary insurance bills.
More From GOBankingRates
