Did you know that the average credit score in the United States is 711? While that is the average, credit scores can range from 300 to 850. Most lenders believe that a credit score below 670 is a bad credit score.
Some of the most common reasons for a low credit score are late payments, accounts in collections, limited credit history, and having a large amount of debt.
Having a low credit score can impact your financial life, but there are steps you can take to improve it. Do you want to learn why building credit is important? If so, keep reading to learn why you should have good credit.
Better Interest Rates
One of the biggest benefits of having a good credit score is that you can qualify for better interest rates. When you apply for a credit card or loan, you will have to pay the lender interest.
If you have a bad credit score, the lender will see you as riskier, and they will charge you more interest. Qualifying for low-interest rates can save you thousands of dollars on credit card debt, car loans, and personal loans.
Are you ready to improve your credit so that you can qualify for better interest rates? If so, srv1st.com is a credit repair company that can help.
Qualify for Better Credit Cards
Credit cards can allow you to track your spending, build your credit, and earn rewards. If you don’t have a good credit score, you may struggle to find credit cards that you qualify for.
Many of the credit cards for low credit scores have low limits, high-interest rates, and no rewards. If you have a good credit score, you can qualify for cards that offer cash back, travel rewards, and gift cards.
For example, if you are someone that loves to travel, you could apply for an airline credit card that allows you to save money on flights.
Higher Approval Odds When Renting
Did you know that your credit can impact your odds of getting an apartment? Most landlords will run your credit when you submit a rental application because they want to make sure you will pay your rent.
If you don’t have a good credit score, you may get denied by an apartment complex even if you make plenty of money. Having good credit can also help you get out of an apartment and into a house when you are ready to buy.
Avoid Security Deposits
Another benefit of building credit is that you can avoid some security deposits. If you have bad credit, you may have to submit a deposit for your utilities, apartment, and cell phone.
Some security deposits are refundable, and others are non-refundable. The main purpose of a security deposit is to protect the company if you do not pay your bill.
Are You Ready to Start Building Credit?
Having good credit can give you better interest rates, higher credit approval odds, and help you save money. To start building credit, pay your bills on time, make a plan for your debt, and have good financial habits.
Did you enjoy reading this article on the importance of building credit? If so, check out the money category to learn how to build credit.