How to maintain the high numbers

Even though the conversation about a good credit score is pretty common and happens almost daily for some, paying attention to maintaining a good one has not been a priority for others. Mistake number one. Surviving with bad credit is doable, but expensive and makes life harder than it should be.

Taking care of your credit score is crucial if you want to avoid missing out on big opportunities. Not only that, but you will also end you paying more than you should – after all, having a good credit score means lower interest rates, among other things! Here are the biggest benefits of having a good credit score.

Six Benefits Of Having A Good Credit Score

1. Lower Interest Rates

When applying for a loan, whether it’s a mortgage or a credit card, a lender will check your credit score. Based on the number, they will determine your interest rates. With a good credit score, you almost always qualify for low-interest rates. The lower the interest rate, the sooner you’ll pay off your debt, and the more assets you’ll have for spending on other things.

2. Higher Mortgage Amounts And Limits

After proving to the banks that you can handle your money and demonstrating to them how responsible you are, they will let you take on more responsibility. Since you’ve proven that you pay back what you owe on time, they will let you borrow more money, giving you greater buying power which is very important in today’s real estate market for example.

3. Easier Approval On Rentals and Jobs

More and more landlords want to check your credit score as a part of their tenant screening process. A bad credit score can definitely affect your chances of getting the apartment you want.  Even some jobs need security clearance and proof you know how to handle your finances. They need to make sure you won’t take bribes, for example, or steal from the company because of your financial issues.

4. Lower Insurance Rates

You need insurance for so many things: tenant’s insurance, home insurance, car insurance, life insurance, etc. Having a good credit score will lower your premium and avoid paying more. Insurance companies use your credit score to design the insurance risk score. If you have a low credit score, you could end up paying 100% more than what you would pay with a good credit score.

5. Negotiating Power

With a good credit score comes leverage to negotiate for anything you’re borrowing for.

You can negotiate your way to a lower interest rate on a new loan or a credit card. With a low credit score, banks and lenders will not let you win this one and the fees on loan terms will remain as high as possible.

6. Build Assets

All the way to wealth. The possibilities are endless – you can get RRSPS loans, rental properties, leverage your mortgage to invest, become an accredited investor, buy abroad, etc.  With low credit, you lose out on major opportunities!

How To Have a Good Credit Score?

By avoiding these common mistakes:

  • Don’t get added to someone’s credit card – have your own.
  • Don’t close all your accounts, even if you don’t use them. The creditors like seeing two accounts. Use them
  • Have two types of loans – a static loan and a revolving loan. For example, a car loan (static) and credit card (revolving).
  • Don’t exceed 65% of your limit.
  • Pay your bills on time. Set up automatic payments to help you with this.