The Less Known Advantages of Good Credit

Although credit scores were initially intended as a criteria for determining creditworthiness, your credit score affects much of your daily life. Most people know that having a good credit score is important when buying a house or a car. Your interest rate, incentives available, and overall cost will be much lower with a good credit score than with a lesser one. However, many people may not know that a good credit score can affect much more than their interest rates.

Insurance Rates
Most insurance companies will run a credit check when you apply for insurance with them, whether you’re applying for auto insurance, homeowner’s insurance, life insurance, or any other type. Consumers with a good rating pay significantly lower insurance rates, sometimes up to several hundred dollars per year, than consumers with a lesser credit score, according to Consumer Reports.

Vehicle Rental Rates
If you need to rent a vehicle, the rental agency will run a credit check. The higher your credit rating, the lower the deposit, if any, that will be required. Particularly for consumers who pay a deposit with cash or a debit card, a lower credit score will increase the amount of the deposit required.

Many employers now routinely run a credit check on their prospective employees, particularly if the position being applied for is in the finance or accounting department. Although we are reminded daily that wealth does not ensure honesty, employers seem to feel that a high credit score indicates a higher degree of financial integrity in an employee.

Rental Housing and Utilities
If you rent rather than own, your credit score may determine whether a prospective landlord will rent to you or not. Understandably, the landlord wants a tenant that will pay his or her bills timely. However, with the proliferation of identity theft, a poor credit score does not guarantee that a prospective tenant will not pay his or her rent. However, maintaining a good credit score will increase your chances of obtaining the rental unit that you want.

When you need to establish utility service, the utility company will run a credit check. A lesser score may cause your deposit to increase substantially or require that you have a co-signer. A high credit score can eliminate the need for a deposit. Due to the high incidence of lesser scores, many utility companies are now offering prepaid options that eliminate the need for a deposit.

Mobile Devices and Plans
When you need a new mobile phone, tablet, or the like, the provider will run a credit check on you. A good credit score can increase the incentives available to you and ensure that you get the best financing terms on your mobile device. A lesser score will increase the amount of down payment required or may prohibit you from obtaining financing.

Professional Licenses
Many entities that govern professional licensure will run a credit check on their applicants. This can apply to any profession, whether you’re a doctor, lawyer, tax preparer, or the like. A good credit score may be a prerequisite to obtaining your professional license.

Government Scrutiny
Although a credit score has little to do with one’s political beliefs, agencies such as the Federal Bureau of Investment, or FBI, are now able to run credit checks on individuals, even if there is little evidence that the individual has a terrorist affiliation. This is one result of the increased security measures taken since 9/11. Since lower credit scores are the result of negative input on your credit report, this can cause you to become the object of government scrutiny.

Your Love Life
In more extreme cases, potential mates are checking credit scores to determine if they want to make a lifelong commitment to someone. In a survey conducted recently, 20 percent of men indicated they wouldn’t marry a person with a bad credit rating and 30 percent of women responded similarly.

Becoming an Entrepreneur
If your intent is to become self-employed, your options are much greater with a good credit score than with a poor one. Since most startups operate with limited finances, entrepreneurs are forced to use their own credit to get the business established. With a poor credit score, this most likely isn’t going to happen.

Whatever the original intent of the credit scoring process, it has become a tool that can either positively or negatively impact your life. If your score needs improving, you can learn quick ways to boost your credit score and the top 5 credit cards to help raise your credit score.

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