The Benefits of Having a Good Credit Score | St. Johns Bank
Having a good credit score can make your financial life easier. Yes, you can live with a poor credit score, but it’s going to make some things more challenging.
Whether you’re on a debt-free journey to help boost your credit score or are trying to find motivation to maintain your good credit score, here are a few reasons why having a good credit score is beneficial to you.
Lower Interest Rates
When you borrow money, the interest rate you receive is largely tied to your credit score. A lower interest rate makes your loan less expensive to pay back, while a higher interest rate makes it more expensive.
The better your credit score, the lower your interest rate will likely be. Since there are no set interest rates on credit cards and loans, financial institutions determine them by reviewing your credit score, amongst other factors.
Higher Chance of Loan and Credit Card Approval
A good credit score doesn’t guarantee approval for loans or credit cards, since lenders consider other factors such as income and debt, but it does improve your chances for approval. Some lenders require a score of 640 or higher for approval, but it varies by company.
Additionally, the lending process can be complex, and a good credit score will only help your application.
Higher Borrowing Capacity
If you have a good credit score, you are more likely to receive a higher loan amount or credit limit. Since you’ve demonstrated that you can pay your bills on time, financial institutions are more likely to give a higher limit on your loans and credit cards.
You can still get approved for certain loans and credit cards with a lower credit score, but you may have a lower limit to work with.
Easier Time Getting a Rental
Many landlords run a credit check for their prospective tenants to see their financial history. A poor credit score could be indicative of paying bills late or bad money management.
Evictions and overdue rent payments can also land on your credit report, which doesn’t look good to a future landlord.
Looking for a new credit card to help build your credit score? Contact us today to learn about our credit card options!