Having bad credit is one of those things that stuck with me for a very long time. At first, I didn’t really know how important credit was, but I learned very quickly. Having no credit or bad credit can really become a financial burden rather quickly and can impact your life in numerous ways. Therefore, it’s very important that you establish good credit, so lenders know that you’re trustworthy. Below, I’m going to list out some areas where having good credit can save you money and you’ll see why your credit score is so important.

Better Financing Options

This is one thing that you probably know about, but you don’t know how just a few points can really make a huge difference on how much money you pay for something that you’re financing. The better your credit score, the lower interest rates you will receive. Chances are, you’ve seen those commercials about new cars and how you can get some amazing financing options on them, but did you even bother to check out the fine print on those ads? If not, you should definitely check those out next time, because not everyone is going to get that amazing deal.

For example, if you were able to get a car financed for four years ant the loan was for $17,000 at 3.9% interest, you would end up paying out a total of $18,388 for the vehicle over that amount of time. Now, let’s say your credit score wasn’t that great and you got an interest rate of 6.9%, you’d end up paying $19,502 for the vehicle over time.

Now, do you want to see something even crazier? Let’s talk about a mortgage loan. If you financed a $150,000 home for 30-years at an interest rate of 3.5% you would end up shelling out $242,483 for the home by the time you paid it off. Now, if you got it at an interest rate of 5.5%, you’d end up shelling out $306,608. Those are some pretty drastic changes, huh?

Better Insurance Rates

Did you know that insurance companies check your credit score when determining how much your rate will be? The better your insurance score, the better rate you will receive. It’s estimated that drivers that have a credit score of over 750 will save as much as $800 more than drivers that have an average credit score.

No More Deposit Fees

Do you know how some people have to put down a deposit for things like utilities or cell phone bills when they’re starting up a new plan? Well, people with good credit scores will often times not have to put down a deposit at all. This is because companies will look at your credit score and if you have a good score, they’ll waive your deposit fees. This could end up saving you hundreds of dollars.

Increased Chances of Successful Price Negotiating

If you have good credit, you’ll definitely have a better chance when it comes to negotiating prices on certain things. For instance, are you trying to get the price lowered on an automobile? If so, you’ll have a better chance of getting a better rate versus someone that has a poor credit score.