A High Credit Score Can Save You Thousands Per Year

Being careless with your credit will cost you. While you may not feel it so much when you're young, it will matter later on and has the potential to save you thousands.

Raising your credit score to 740 will be worth it when you realize what you could do with the money you lost by keeping your credit score low.

You'll Get Lower Interest Rates

Banks reserve great interest rates for people who prove that they can manage their money well.

For Your Home

A better interest rate on your mortgage will give you the largest amount of savings. Those with a high credit score enjoy a lower interest rate and a lower monthly payment.

People who have a low credit score may find that they can't get a mortgage at all. If they do, it might be with a significantly higher interest rate.

Think about what you can do with the extra cash - spend it on fun, entertainment, or another investment. Having lower monthly payments may also mean that you can pay off your home loan sooner and save even more money.

For Your Car

A high credit score will also get you a better interest rate when you apply for an auto loan. You could qualify for a better car as well. A low credit score will likely mean a smaller loan, an older car, and less time to repay it.

You’ll Qualify For A Lower Down Payment

Getting a lower interest rate on a loan also means that you will also be able to enjoy making a lower down payment.

When you have a low credit score, the lender will expect a higher down payment. They have less confidence you will be able to repay the loan puts them at less risk because they're lending you less money.

For Your Home

Good credit enables you to get a larger loan and more time to repay it.

The FHA, for instance, only requires that you need a down payment of 3.5 percent, and this is on a credit score of just 580. Anything lower than that requires 10 percent. Paying less each month on your mortgage also enables you to get a good homeowner's insurance policy.

For Your Car

Buying a car with a good credit score is the same. A lender will loan you more money toward the purchase of your next car if you have good credit. This means using less of your own money at the time of purchase. You’ll also be able to afford better car insurance.

Better Housing Options For Renters

When you go to rent a house or apartment, landlords will likely take a look at your credit score. If it's low, they may not rent to you at all, require you to make extra payments or require you to get a co-signer. This could limit your ability to get comfortable housing. It may also be inconvenient in that it is far away from good jobs or reliable transportation.

Think about credit repair before you make a major purchase. Plan ahead, pay off your credit card debts, review your credit score and talk to a credit counselor if necessary.