5 little-known advantages of having a high credit score

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Good credit offers many more benefits than just lower interest rates.

Key points

  • A high credit score is a significant advantage in any situation that requires a credit check.
  • Rental applications and utility installation are two common situations where your credit could come into play.
  • Your credit can also affect your insurance rates in most states.

Personal finance advice talks a lot about the importance of a high credit score, and you probably already know some of its benefits. Helps you qualify for lower interest rates on any type of loan, including mortgages. It could also help you get approved for the best credit cards that are not available to consumers with lower scores.

But what if you don’t plan to borrow money and credit cards aren’t a big deal for you? There are still several ways your credit can affect your everyday life that many people are unaware of. These are the little-known advantages of a high credit score brings you

1. It is easier to rent a home

A credit check is a standard part of the rental process. Most property management companies do, and even if you’re renting a place directly from the owner, there’s a good chance they’ll want to check your credit.

Some landlords turn away applicants who don’t meet the minimum credit score requirements, especially if they have other potential tenants to choose from. Or, they may require a larger security deposit. With a high credit score, it will be much easier to get approved for a rental without paying more up front.

2. You could get cheaper auto and home insurance

Although it’s a controversial practice, insurance companies can use credit scores to help set premiums in most states. Currently, there are only three states that prohibit the use of credit scores to set insurance rates: California, Hawaii and Massachusetts.

Anywhere else, your credit history is fair game for insurance companies. It can also make a big difference. In The Ascent’s investigation of the average car insurance rates, drivers with excellent credit paid an average of $1,846 per year for auto insurance. Drivers with bad credit paid more than twice as much, $3,955 on average.

3. You do not need to pay deposits for utilities

Your credit could even affect something as simple as connecting electricity and water in a new place. Utility companies often require people with low credit scores to pay a deposit to receive service. People with high credit scores usually don’t need to do this.

So, in addition to possibly paying a much higher security deposit on an apartment, you may also have to pay more deposits to utility providers. As you can see, moving costs could be much higher if your credit rating is low.

4. Can help with pre-employment screenings

About 25% of employers run credit checks while hiring for some positions, according to a national survey by the Association for Professional Background Research and HR.com. While employers don’t see your credit score, they do get a modified version of your credit report that includes your accounts, payment history, and credit usage.

For certain types of jobs, your credit history could make or break your application. If you’re applying for a position that will have access to money, sensitive data, or requires a security clearance, the employer will most likely check your credit.

5. It can help you get a smartphone and wireless service

Most major wireless carriers offer financing plans for popular smartphones. If, for example, you want upgrade to iPhone 14, many providers will allow you to pay the price of the phone in monthly installments. They will also run a credit check first to see if you have a history of paying your bills on time.

A credit check is also usually required to obtain postpaid wireless service. However, you can avoid this by opting for a prepaid cell phone plan.

There are several ways a high credit score makes life less expensive and more convenient. If you haven’t already, it’s worth learning how to increase your credit score so yours is a help and not a hindrance.

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