It makes sense to want a good credit score, but you never truly realize why until the rubber hits the road. Like when you go to the Toyota dealer wanting to buy a new Camry.
Camry is traditionally the best-selling car in the U.S., with a manufacturer’s suggested retail price of $23,070 for the LE model. You want that car, but you can’t put any money down and want a 48-month loan.
The salesperson takes that information and then crunches the most important number – your credit score. It’s 742, which qualifies for a 4.0 % interest rate. Your monthly payment will be $520.90.
Difference Between a Good and Bad Credit Score
If your score had been below 630, you might have been stuck with a 12.9% interest rate and your monthly payment would have been $617.77.
That’s a $4,649.76 difference over the life of the loan, or 4,649.76 reasons you should have good credit. There are plenty more.
Like if you move and call utility companies for new service. With a good credit score, the company is likely to waive the security deposit and flip the switch for power. A bad credit score means you’ll need anywhere from $100 to $250 deposit to get the lights and air conditioner running.
An excellent score qualifies you for credit cards with the most attractive rates, rewards points, gifts and cash-back deals. It gives you bargaining power, like when you are looking to rent a vacation home. The rental agent may waive fees or give you a lower interest rate. The same goes when you apply for a personal loan from a bank.