Question from GTY: Can you give me some ideas of ‘treat’ to look forward to when my credit improves?
Hello,
Improving your credit score is a significant financial achievement that opens up a variety of opportunities. Here are some ‘treats’ or rewards you can look forward to when your credit improves:
Lower Interest Rates
A higher credit score often leads to lower interest rates on loans and credit cards. This means you’ll pay less over time for any borrowed money. According to Experian, one of the three major credit bureaus, a higher credit score can save you thousands of dollars over the life of your loans.
Higher Credit Limits
With an improved credit score, you may be eligible for higher credit limits. This can give you more financial flexibility and also help keep your credit utilization rate low, which can further improve your credit score.
Approval for Larger Loans
If you’ve been eyeing a new home or car, an improved credit score can help you get approved for larger loans. This can make these big-ticket purchases more within reach.
Better Insurance Rates
Many insurance companies use credit-based insurance scores to help determine rates. A higher credit score can lead to lower car and home insurance premiums.
Rewards and Premium Credit Cards
With a better credit score, you’ll likely qualify for credit cards with better rewards programs. These can include:
- Cash back on purchases
- Travel rewards, including airline miles and hotel points
- Exclusive access to events and sales
Remember, while these ‘treats’ are exciting, it’s important to continue practicing good financial habits even as your credit improves. This includes paying all bills on time, keeping credit utilization low, and not taking on debt you can’t afford. By doing so, you’ll be able to maintain your improved credit score and continue to reap the benefits.
