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Why You Really, REALLY Want To Improve Your Credit Score

Updated on October 30, 2012

Basics of a Good Credit Score

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Why a good credit score matters

Okay, so you know that you're supposed to have a good credit score but the thing that you haven't admitted to people when the conversation has come up is that you don't actually know what difference it makes. Sure, you know that credit card companies look at your credit score before agreeing to give you a loan or a new credit card. But if you're not planning to apply for a new loan anytime soon, does it matter what your credit score is? Yes. Let's take a look at the reasons why you want to improve your credit score as much as you can.

Good credit helps you borrow money

First off, you already know the basic reason to improve your credit score which is that this is the number that credit card companies and other lenders will look at to see if they are interested in letting you borrow some money. Maybe you're not planning on getting a new loan right now, but what if an emergency came up and you really needed the extra cash. You'd want to be able to get it with as little hassle as possible and a good credit score can help with that.

Good credit helps you get lower rates

But, a good credit score does more than just make sure you can get more credit. It actually improves your current credit situation. Improving you credit score can help give you leverage in asking for better rates on your existing accounts. When you can demonstrate to your lenders that you're a good borrower, they are more likely to offer you deals in order to keep your business.

Good credit for people with no credit

Okay, but let's say that your credit score is needs improving because you just don't have a lot of credit established (as opposed to actually having bad credit). Why should you even be concerned about it if you're someone who doesn't do a lot of borrowing? Well, your credit score gets looked at by people who want to know that you can pay your bills. This means that cell phone companies, utilities and even apartment managers will look at your credit score to see if it looks like you'll pay them in a timely manner. Even if you don't want to rack up any credit card debt, it is important to establish a credit history with a positive credit score so that you can have an easier time taking care of these things in life.

Summary of what credit is all about

Basically, your credit score is your record of how much money you have borrowed over time and how good you are at paying it back. There are going to be many different situations in life when you're going to need to prove that you are capable of being a responsible borrower. Some of these times, like with moving to a new apartment or dealing with a financial emergency, are incredibly stressful on their own. You don't want to add to them the stress of not being able to qualify for a loan because of your poor credit score. So, improve it while things are going well in order to make things go more smoothly down the line.


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  • frugalfamily profile image

    Brenda Trott, M.Ed 6 years ago from Houston, TX

    You are right! You DON'T want that kind of stress! If you already know you have a low score, you might want to check out my hub:

    I like your writing voice, I'm now a follower:)