How Good Credit Can Save You Money

We all want good credit so we can get an automobile, credit cards, or purchase a home. But, beyond those types of consumer loans, your credit report can cost you when it comes to your everyday expenses.

Your credit history can keep you from getting utility connections, favorable telephone rates, the highest quality auto, or home owner's insurance, and even keep you from getting a job. A bad credit report can also cause you to pay higher deposits and fees for most common everyday services.

Utility companies usually set minimum standards for service connections. If your report shows collection accounts for past utility bills, it could be that you are not eligible for service at all or you may have to pay a higher deposit than a customer with good credit who may not have to make any type of deposit.

Telephone services have standards too. People with a good credit don't have to pay deposits for home or cell phone services.

Good credit enables you to get better insurance rates. Whether it  be home, auto, or life insurance. These companies set minimum standards of credit for their policyholders. So consumers with poor credit will have to pay a higher rate for their coverage. A lot of auto insurance companies now base your premiums on your credit score, these companies offer a 17% discount for a score over 625 and give a 25% discount for a score over 725. Why? Because studies say that people who are responsible with their credit are also responsible with their everyday lives and their belongings.

Bad credit can hurt you when searching for a job. More and more employers run credit reports applicants. Why? Because studies say that people who are responsible with their credit are also responsible with their everyday lives and their belongings.

Poor credit scores means you pay more for your home financing. Mortgages cost more. If you have low credit scores you will most likely pay more in upfront fees, and pay higher interest rates than those with higher credit scores. How much? I'm glad you asked. A mortgage loan for $150,000 with a 30-year fixed-rate mortgage and a interest rate of 5.375 percent costs  $839.96 a month; bad credit scores raise the interest rate to 9 percent and the payments to $1,206.93 a month, so as you see from this example, good credit means that you can save $366.97each and every month. This would be a difference of $132,109.20 over a 30year period of time.