Ever since the COVID-19 pandemic began, we have been constantly conscious about our physical health more than ever. All of a sudden, we realized the value of putting our health first to boost our immune system and avoid contracting the virus. However, our health needs don’t stop at just that.
Looking out for your financial health must also be included in your priorities. On that note, your personal credit score serves as a measurement of your overall financial status and creditworthiness. Further, it’s crucial for you to build good credit early on as this is a key piece of your financial identity.
Now, what is a good credit score? In the Philippines, a credit score ranges from 300 to 850, with 850 as the highest rating. Further, if your credit score ranges from 700 to 749, it means you have good credit standing, whereas from 650 to 699 is fair, while from 600 to 649 is poor. With these, scores that rank below 600 are already considered as bad credit scores. You can check your credit report by accessing creditinfo.gov.ph and filing a request from their Services tab.
What’s in it for you to maintain a good credit standing? In this blog, we outline the top good credit score benefits you must take note of!
You may have an easier time renting an apartment.
Regardless of whether you plan to rent or buy a house, you will still need a good credit score. Even if many people don’t seem to realize it, your credit score actually is one of the factors that landlords take into consideration with your rental application. On that note, one of the benefits of having a good credit score is that you’re more likely to be approved as a tenant. This is because your on-time payment behavior is likely to be more attractive to landlords than having multiple delinquencies. On the other hand, having a poor credit score may require you to pay a higher deposit, sign a short-term lease agreement, or even be denied housing. This is why it’s important for you to remember that landlords use credit scores as part of their tenant screening process.
You can also enjoy the benefits of good credit when buying a car.
When buying a car, it’s just wise for you to avail of car insurance as well. With that, having a good credit score gives you an advantage when you finally decide to buy your own car.
Insurance companies use information from your credit card report and insurance history to develop your insurance risk score. Often, they penalize people who have poor credit scores with higher insurance premiums. If you maintain a good one, you’re more likely to pay less for insurance than other applicants with lower credit scores.
You can enjoy lower interest rates when you borrow money.
Borrowing money entails costs you need to pay. One of these is called the interest rate. Often, the interest rate you get is directly tied to your credit score. If you have a good one, you’ll almost always qualify for the best interest rates. Moreover, you’ll be entitled to pay lower finance charges on credit card balances and loans. With having to pay less money in interest, you’ll be able to pay off the debt faster and have more money for your other expenses.
You’ll be eligible for larger credit card and loan limits.
One of the most common good credit score benefits is its long-term payoff. If you have a good credit score, you’re more likely to be eligible for larger loans. You can use such loans when you take out a mortgage in some high-cost-of-living areas. On top of that, you may also qualify for higher credit card limits as well.
You also need to note that your borrowing capacity is based on your income and your credit score. That said, banks are willing to let you borrow more money because you’ve shown that you’re able to pay back what you borrow on time. Though, you may still get approved for some loans even if you have a bad credit score, but do expect that the amount will be more limited.
You have access to awesome perks and great rewards.
Apart from having eligibility to enjoy larger credit card and loan limits, you can also gain access to exclusive perks! A great example is that you’ll be able to unlock a wider variety of credit cards. Since a lot of the best rewards cards require excellent credit scores for approval, you can enjoy this privilege if you maintain your good credit standing. Such cards include travel rewards cards that you can use to fund your vacations and cash-back rewards cards that let you earn a percentage back on your spending.
A good credit score can help you build a good reputation.
Overall, having a good credit score also helps you build a trustworthy name. Maintaining a good credit standing shows you’re a responsible borrower, and this may come in handy when you want to refinance existing debt, take out a personal loan, or upgrade to a better credit card with your current issuer.
Moreover, your good credit habits can also follow you into the workplace. Some employers, depending on your nature of work or their nature of business, look into your financial background to have a better grasp of your reputation. This typically happens in positions that come with the responsibility of making top-level financial decisions.
A good credit score can also help you be prepared for the future.
Change is the only constant thing in the world. As you continue taking on responsibilities while you’re building your future, you may encounter sudden changes or transitions in your life. One great example is when you build your own family, decide to buy your own house, and save up for your children’s education.
As these are long-term expenses, you might need to borrow money to finance your needs. So, when you have a good credit score, you’re more likely to meet lending approval guidelines. Going through that life-changing transition can be less of a financial hassle when you can enjoy the benefits of a good credit score.
Are you sold with these advantages you can experience? Remember, building and maintaining a strong credit profile plays a key role in most lending decisions. With this, consider reviewing your financial health and keep it in check. This way, you can establish short- and long-term plans that complement your personal and career goals as well.
For more personal growth hacks like this, head on to Bossjob’s blog archives!
