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When it comes to building overall strong personal financial health, having a good credit score is extremely important. Those that have a good credit score will be able to take advantage of lower interest rates on a wide variety of debt and loan products. Those that do not have a good credit score could struggle to even be approved for a mortgage, credit card, or other type of loan that they desperately need. For Millennials that have a good credit score, there are five ways that they can take advantage of a good score to improve their financial position.
Get lower interest rates
When it comes to taking advantage of a good credit score, one of the most important things that someone can do is get lower interest rates on a wide variety of loan products. When lending to any type of consumer, a lender will take into consideration the credit score of the borrower. For student loans, mortgages, auto loans, and other types of loans, those with lower credit scores will undoubtedly have to pay higher rates. Those with higher credit scores could ultimately get a great offer and save thousands of dollars over the course of the loan.
Attractive credit card promotions
While most consumer experts will caution anyone from using credit cards too frequently, those that are able to manage their credit properly could actually use them to their advantage. In order to entice new customers, many credit card providers today offer extremely lucrative promotional bonuses. These bonuses can include receiving cash back, free airline tickets, and a variety of other perks. While these can be very advantageous, they are normally reserved for those with great credit scores.
Job application improvement
Today, many employers incorporate a credit report and score check into any background check. Many employers today will consider a background and credit check to be a good indication of the overall level of responsibility of an applicant. If you have a very good credit score and clean report, it could leave a good impression in the mind of any employer. This could prove to be the deciding factor when you are applying for a new job.
Another way that Millennials can use their good credit score to their advantage is by getting better insurance rates. Auto and other types of insurance providers have linked good credit scores to being less of an insurance risk. Because of this, many insurance companies will pull a credit report and score before quoting an insurance policy. Those with a good score and history could end up saving money off of their insurance rates.
While mortgage lenders will always pull a credit report before offering a loan, a landlord may also require that you provide your credit history. A landlord will likely want to make sure that you have a history of paying your bills on time. If you have a good score, you could avoid having to pay fees and post reserves that are often required to new tenants that have lower than ideal credit scores.