What Are the Benefits of a Good Credit Score? Rich Mom Answers

Credit scores. You hear about credit scores all the time. But, what are the benefits of having a good (actually great) credit score?

Good credit gives you powers…benefits.  Below, I list seven benefits of great credit.

The First Benefit of a Good Credit Score

The first benefit of good credit is that you will be able to get credit cards that you would like. There are some very useful credit cards out there that offer rewards such as cash back and airline mileage that can be used toward upgraded or even free flights. 

The Second Benefit of a Good Credit Score

The second benefit of good credit is that once you have a credit card, you may want to request a higher credit limit. If you get a higher credit limit, you will be able to make larger purchases using your credit card. That means more convenience, and more credit card rewards! 

The Third Benefit

The third benefit of good credit is that you are more likely to be able to get the apartment rental that you want. There is no uniform score that all landlords look for in a potential renter. Furthermore, not all landlords do credit checks. But, many do, and I think that more and more will. Also, if you do get approved, with a lower credit score, the landlord may require a higher security deposit.

The Fourth Benefit

The fourth benefit of good credit is that if you decide that you are ready to buy a house or condominium, having a high credit score will make it so that you will more likely be able to get approved for a mortgage. So, essentially, it can help you buy that home that you like. 

The Fifth Benefit

The fifth benefit of good credit is that once you have the apartment (or house) that you want, you will need utilities. Your utility company can also check your credit score. They may charge a deposit or higher deposit, if you do not have good credit.

In addition to utilities, you need to have renter or homeowner insurance.

The Sixth Benefit

The sixth benefit of good credit is that you can get better insurance rates for your car or your home. Insurance companies think that people with lower credit scores are more likely to make a claim. Insurance companies cannot deny you insurance based on your credit scores. But they can charge you more money if you have poor credit scores. 

The Seventh and Last Benefit of a Good Credit Score

The seventh benefit of having a good credit score is that it can make it more likely that you can get a job. If you have poor credit, the potential employer may fear that you will be a less than responsible employee. In fact, some employers may worry about your trustworthiness. 

It takes work to get and maintain a great credit score. But, as you can see from the benefits listed above, it is worth it to put in the extra effort. Even if there is nothing that you think that you need credit for right now, start working on getting a beautiful credit score! 

Want To Learn More?

What Is a Credit Score?What Is An Example of an Inquiry on a Credit Report? Rich Mom Answers

What Credit Score Is Needed to Rent an Apartment? Rich Mom AnswersWhat Is a FICO Score? Rich Mom Answers

How often should I check my credit score? 

You should check your credit score once a month. The federal government says that you should check it once per year. However, I think that that is not frequent enough to catch mistakes, or ever worse, fraud. Besides, if you are going after a great score, you need to know what the current score is, in order to decide if you need to do something to improve it. 

Are you satisfied with your credit score? Let me know. 

Do you want to know more about what I say about credit scores? Check out some of my other bits of financial literacy.

Don’t forget to subscribe to the Rich Mom, Poor Kid blog. 

My name is Valerie, aka “Rich Mom.” Rich Mom Answers is a segment of the Rich Mom, Poor Kid blog that gives short answers to my daughter’s personal finance questions. The goal of Rich Mom Answers is to teach her the vocabulary of financial literacy and to answer as many of the common questions that come up when thinking about personal finances.

What and I Doing and Why?

I started sharing these bits of financial information in order to encourage my daughter (aka Poor Kid), because I want her to get better with her finances and know how to create her own wealth. Wealth gives us choices and freedom. Wealth allows us to be generous and help others.  I want her to know how to kick a**, build wealth, and use her time having a beautiful free and generous life. I decided that I wanted to share them with her friends, and you. The intended audience is people age 30 and under or financial literacy beginners.  My goal is to encourage others to  take control of their own finances so that they can make better decisions and have financial improvement.

The information shared here is not intended as financial advice, just entertainment and encouragement. 

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I am not an investment advisor. Always do your own due diligence and research before investing. Check with your own investment advisor. 

Also remember that past performance is not a guarantee of future performance.