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Your credit score affects a surprising amount of your financial life. We all strive for a good credit report, but how many of us know exactly what our credit influences? A good credit score can affect your insurance rates, whether a business will hire you, and will save you money when financing your home. Besides the ordinary consumer loans we know of (such as credit cards, automobile financing, etc.), your credit report can save you thousands of dollars in everyday living expenses.
Insurance Rates
A poor credit score will cost you more for less coverage for auto, home owner’s, and life insurance. Insurance companies set minimum credit standards for policy holders to safeguard against clients who may have questionable credit. Innumerable auto insurance companies base your monthly premiums directly off of your credit score. A credit score over 725 can save you up to 25% on auto insurance per month and 17% for a score of 625. According to research, those that are careful with their credit are also more careful with their property investments and are safer drivers.
The Job Market
Did you realize that your credit score can cost you that big job you’ve been hoping for? Employers equate a higher credit score with both character and integrity, thus more and more employers are running job applicants’ credit and using the information to judge how suitable they are for a given position. Businesses see applicants with questionable credit as a possible liability. You may have Master’s Degree in Quantum Physics and a flawless academic record, but not meet the minimum credit standards of an employer.
Home Financing
A low credit score can cost you thousands of dollars in upfront fees and interest rates on your mortgage. With a better credit score you save hundreds of dollars a month or finance a more expensive house with the same exact income. A 30 year, fixed-rate mortgage on a $150,000 home with 5.72% interest rate costs roughly $870 per month; with a poor credit score, your interest rate raises to 9% and the monthly payments go up to $1,200. That’s a savings of $330 dollars a month based solely on your credit score.
To save money on everyday expenses, get the most affordable first-rate insurance, and the best financing for your home, work on raising your credit score. So many facets of modern life are directly affected by these three numbers. Save yourself the headache.
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