The Deal with Credit: Why Credit is Important and How it Can Be Used to Your Advantage

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Are you ready for a truth bomb? Credit isn’t something to be afraid of! But rather, something you should know how to use to your advantage to make certain life choices easier. Good standing credit comes in handy more often than you might think — it’s not all about mortgages and cars. There are everyday decisions you may not even realize credit has relevancy, like buying a cell phone or paying less interest on student loans.

It’s important to distinguish good credit from bad, and how it works in your favor. Get started with Credit Karma today to see and monitor your credit score over time.

Improves chances of renting an apartment

When applying to rent an apartment or house, the property manager may require a credit history check — this is totally routine and shouldn’t impact your credit score. It gives landlords insight into whether applicants make on-time payments, and if they would be reliable tenants. With a good credit score, your odds of getting approved to rent go up. Similar to how a credit score is an indication of financial responsibility to landlords, a great credit score also makes buying a home easier too. That’s because it helps boost your chances of qualifying for a mortgage loan from banks or lenders.

Ability to refinance student loans

If you’re considering refinancing student loans, having a healthy credit score will be a major plus. In general, people with good credit are typically given better loan terms, but it’s important to know your options. For student loans, having good credit tells lenders you’re a low-risk borrower, which could potentially lead to qualifying for lower interest rates, reduced monthly payments, and the possibility to help pay off student loans ahead of schedule.

Helps job applications shine

If you’re planning to apply for a job or already have one, you know that occasionally, companies will ask to run a credit check as part of the application process. Much like background screenings, a credit check requires your consent, so you should be given the option to say yes or no. For employers, it’s essentially a way to gauge an applicant’s credibility or determine if they will be a good fit on the team.

Eligible for better terms on cell phones

Whether you want to upgrade a phone, switch providers, or add a new line to your account, credit checks are often part of the process. In these situations, having good credit could mean favorable costs and offers. Depending on the cell phone provider and your credit score, you could qualify for little or no interest upfront or possibly even lower monthly payments.

Access to more credit card perks

The value of credit cards goes beyond payment flexibility and the opportunity to build credit. With the right credit score, there are all kinds of reward programs (even low-interest rates) to choose from, such as airfare points, cashback, even discounts at participating retailers. If you’re curious as to what credit card may be right for you, you can compare personalized offers for credit cards, loans and more without hurting your scores. It’s all on Credit Karma.

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