Credit score week: What can I do with a good credit score?

financialchecklist 2

You've diligently repaid your outstanding payments and pared down your debts. Over time, you've made an effort to get your credit score back into the black. But what does it mean for your finances?

A good credit score can open up a world of financial strategy opportunities, instead of inflexibly limiting you to the bare bones of financial choices. Now that you're in a position to enjoy a good credit score, let these benefits weigh on your mind.

Become a home owner - for cheaper

A lender is always going to assess your credit score no matter what the product. But the stakes are rarely as high as when you're planning on purchasing a house.

While your credit score will always have its black marks listed, it also takes into account the positive steps you've taken in terms of credit. If you can show a lender you've made inroads in recent times to make timely payments and keep a spotless history, they'll be more likely to lend you money at more advantageous rates.

When it comes to a property, this could be a huge leg up for your financial future: With a lower interest rate, not only will repaying your home loan be easier and save you thousands of dollars, you can more easily leverage that property as an investment.

Get lower insurance premiums

Taking out insurance, whether it's total permanent disability insurance for yourself or vehicle insurance for your car, is always a prudent decision. Even so, it can feel frustrating to have to pay the premium every month, which can be pricey in itself.

With a more favourable credit score, however, you could well be offered lower premiums on your insurance - giving you no excuse to avoid this crucial tool.

Start a business

The fact that lenders are less likely to look at you warily is not just good if you want to finally become a home-owner - it's also great if you're hoping to start an enterprise of your very own.

With your finances in order, you should have less trouble securing a line of credit to start a business, and you may even find you can get a bigger loan with more favourable conditions, too.