You’re probably aware that having a good credit score is important. Maybe you pay your bills before their due date most of the time, and sometimes you pay more than the minimum due. However, do you understand the true impact your credit has on all areas of your life? Here are five ways that your credit score can affect your future.
Renting a Home or Apartment
When you’re looking for a new place to live, having your credit reviewed is a necessary part of the application process. Owners and property managers want to know how reliable you are with paying your bills to see if they can depend on you to pay your rent on time. Having a higher credit score may mean you are chosen out of a pool of applicants when the rental market is hot. Though a low credit score doesn’t rule you out as a candidate for a home or apartment, don’t be surprised if you need to pay a larger security deposit.
Setting Up Utilities
Once you are in your own place, you need to set up utilities. These services also run a credit report to ensure you have been paying your previous bills on time. A satisfactory credit score may keep you from having to pay a security deposit, while a lower score could mean putting money down before they activate the electricity. If you have poor credit, the utilities may work with you to spread your deposit into a few monthly payments, so you don’t have to go without their services. However, being able to establish an account based on your excellent payment history is the ideal situation.
Buying a Car
It’s no secret that buying a car requires a credit check. However, your overall score plays a big part in how much you have to pay for your dream car. When credit scores are low, the dealership is limited to working with banks willing to take on a high-risk loan. These loans often require a sizeable down payment and have a much higher interest rate. This could equal thousands of extra dollars paid over the life of the loan because your credit score was below the desired level. On the other hand, higher credit scores give you access to special sales and rebates and help you qualify for a fantastic interest rate.
Paying for Car Insurance
Once you have your vehicle, you need to buy the best insurance from Ontario. When completing an application with either a local branch or online, the insurance company requests permission to run your credit. Your score helps determine the amount of money charged for your policy each month. Lower credit scores require you to pay more for our policy and may even require a portion to be paid upfront. Having a better credit score allows you to keep more money in your pocket so you can spend it driving your car instead of just insuring it.
Upgrading Your Cell Phone
Another item you may be looking to buy is a new cell phone. It seems as if your favorite phone gets upgraded every year. Being able to afford a new model can be very expensive. While your credit doesn’t come into play if you pay cash for the new phone, it does if you need to lease the phone or make payments to afford it. Poor credit could mean you don’t qualify for a payment plan, meaning you need to save up for the phone or opt for an older less expensive design.
Keeping your credit in good standing raises your credit score. A high score gives you access to lower interest rates, smaller deposit requirements, excellent loan options, lower insurance rates, and the latest luxuries.