Maintaining a Good Credit Score
Maintaining a good credit score is important for several reasons. Not only does it impact one’s ability to borrow money, but it can also affect the interest rates one is charged on loans and the amount of rent they will be able to negotiate on an apartment. In this blog post, educator Jonathan Osler San Francisco explains the importance of maintaining a good credit score.
1. Acquiring a Loan
One of the most important things a good credit score will do is to get a loan quickly when one needs it. This could be for a car, a house, or even to consolidate debt. A high credit score denotes that one is a low-risk borrower, which makes lenders more likely to work with them. On the other hand, a low credit score may make it difficult or impossible to get a loan. Even if one can find a lender willing to work with them, they may end up paying much higher interest rates than those with good credit scores. In other words, a good credit score could save thousands of dollars in interest payments over the life of a loan. For this reason alone, maintaining a good credit score is well worth the time.
2. Lower Interest Rates
In addition to making it easier to get a loan, a good credit score will also result in lower interest rates. This is because lenders see individuals with high credit scores as low-risk borrowers who are more likely to repay their loans on time. As such, they are willing to offer these borrowers lower interest rates as an incentive to do business with them. Lower interest rates can save an individual a significant amount of money over the life of a loan, so it’s well worth maintaining a good credit score.
3. Negotiating Power
A good credit score can give one more negotiating power regarding rent. Landlords often use credit scores to screen tenants, and those with good credit scores are typically seen as more responsible and reliable. Landlords may be more likely to negotiate rent with these tenants. This is especially true in competitive rental markets where landlords are looking for any way to screen tenants. A good credit score can give one the negotiating power they need to get a lower rent price.
4. Get a Job
While it’s not as common, some employers check credit scores when considering job applicants. This is often done for positions that involve handling money or sensitive information. A good credit score can give an applicant a leg up in the hiring process, while a bad credit score may make it more challenging to get hired. While this isn’t always the case, it’s worth keeping in mind that a good credit score can impact more than just one’s ability to borrow money.
5. Peace of Mind
Finally, maintaining a good credit score can provide peace of mind. According to Jonathan Osler San Francisco, knowing that one’s financial future is secure can be a great weight. It can also give them the confidence to pursue other opportunities, secure in the knowledge that they have the financial resources to back them up.
For all these reasons, it’s clear that maintaining a good credit score is critical. It’s well worth the effort to keep one’s credit score high, and the peace of mind it can provide is priceless.