How Improving Your Credit Score Helps Your Finances
May 18, 2022 | Emma Frost
Nothing says more about your financial well-being than your credit score. Your number reveals how responsible you are with not just making payments, but making them on time. Credit scores are taken very seriously, and those with lower numbers are generally seen as “high-risk.” This is why improving credit score ratings is so important.
One thing to remember is that your credit score isn’t permanent – whether it is already good or bad. You can work steadily to raise your credit profile by charging less, regularly paying on time, and making concerted efforts to eliminate your debt. Here are some of the many ways that improving your credit score makes you more financially stable.
Reasons Why You Should Start Improving Credit Score
Good Credit Says You Are Reliable
When it comes to improving a credit score, it is important to remember that payment history – your record of paying your debt on time – makes up most of your credit score. It includes your payments related to your credit cards, mortgages, student loans, and more. Missing payments, making payments late, or not paying at least the minimum owed will certainly decrease your score.
Improving your credit score by paying your bills on time puts you in the good graces of lenders in the future who you may rely on to buy a home or buy a car. Credit utilization is the second most important factor when it comes to your credit score. If you exceed too much of your credit limit on any specific card, it can negatively impact your score.
This is also the case when it comes to maxing out your credit limit or having too many credit card balances at once. Instead, lowering the amounts you owe at any time to go about improving your credit score will make you more attractive financially in the future when you need a loan for whatever reason.
Improving Credit Will Make It Easier To Rent An Apartment
If you’ve ever been on an apartment hunt, you know that the application process can often be extensive. Apartment managers not only do background checks but also perform financial wellness checks. Usually, a credit score considered fair – which is somewhere in the low-600 range – is the minimum required to qualify.
But property managers and landlords can also be very strict about whom they rent to, requiring higher credit scores such as 700 and above. Improving credit score ratings will come in handy when it comes time for you to look for a new home, especially when you’re living in an incredibly competitive rental market.
See Related: What Damages Your Credit and How To Avoid It
Good Credit Can Help Get Better Car And Home Insurance Rates
Insurance rates are often significant financial drains, but you may be able to save on your premiums if you gave a good credit standing. Insurance companies in many states will weigh the risk of granting you insurance based on your money-handling history, otherwise known as credit-based insurance scoring.
While having a low credit score can’t be used as a reason to deny you insurance or cancel an insurance policy, many insurance companies say for their customers that have a good credit score, this can lead to lower premium rates for as much as half of their policyholders.
Having Good Credit Can Help You Land Certain Jobs
While not every company performs a personal credit check when you apply for an open position, jobs that require security clearances or those that work with large amounts of money frequently do. The truth is you flat-out may not qualify for such work if you have a bad credit score.
To some employers, having such a score that they deem as bad might indicate that you have significant financial difficulties and may be prone to accepting bribes to solve your financial struggles. This is another good reason you should take improving credit score ratings seriously and start today.
You Can Get Better Loans In The Future With Good Credit
Improving credit score is never just good for the present — it can be a vital part of a financial feature. Those with higher credit scores usually are eligible for higher credit limits and larger loan amounts, which can be extremely helpful if you live in a place with a high cost of living.
While You Improve Your Credit, You Can Get Auto Title Loans
Improving credit score is one of the most important steps to fiscal responsibility. But If while you are improving your credit you are hit with a financial emergency, auto title loans may be able to help you make payments fast so you can get back to paying down your debts.
At Southwest Title Loans, we encourage those with a range of credit scores, good or bad, to get an auto title loan. To get started, fill out the short loan inquiry form on our homepage. A title loan representative from the nearest Arizona loan location will give you a call to help you get through the process.
Start Improving Credit Score Rating Right Now
Improving your credit score can provide a solid foundation for a more financially stable present and future. So if you’ve been wondering if you should make improving your credit a priority, these reasons will confirm your thoughts. And if you’re looking to cover a financial emergency quickly, consider an auto title loan from Southwest Title Loans. Fill out the online form to get started.
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.