Why a High Credit Score Can Actually Save You Money
There are May Benefits to a High Credit Score
You’ve heard hundreds of times. "It's important it is for you to have a high credit score". And, "Don't do things that hurt your credit score".
Knowing and protecting your credit score is important. But why?
The truth is, there are a lot of benefits to having a high credit score. One of them being that it can and will save you quite a lot of money. From better interest rates to lower housing costs, a great credit score can set you up with savings that can help build your financial security.
It’s Easier to Get Loans
There’s a good chance you know this one. Having a high credit score makes it easier for you to get a loan. Why? Lenders don’t want risk. When they lend someone money, they want to get it back. Having a good credit score shows them that you have a history of successfully borrowing money and paying it back on time. That makes it a lot less risky for them to give you a loan and more certain that they will be paid back on schedule and without disruption. Better credit = easier access to capital.
Borrowing Costs Less
If you have a good credit score, no matter what sort of loan you are applying for (car loan, line of credit, mortgage, etc.), you’ll get a more favorable interest rate. The lower the rate, the more you will save over the life of a loan.
Let's run through an example. If you have OK credit and borrow $30,000 at 6 percent interest and have to pay it off over 10 years, you’ll pay $9,967.38 in interest during the life of that loan. However, if you have very good credit and you’re able to get a 3 percent interest rate for that same $30,000 load that has to be paid back in 10 years, you would only pay $4,761.87 over that same period. The person who has OK credit and a 6% rate would be paying 109% more in interest over that ten year period. Better credit = lower costs of capital.
Think about it. Your car loan, college tuition loans and your mortgage can all benefit from lower interest rates and keep your hard earned money working for you vs. paying your debt.
Insurance My Be Cheaper
Depending on your state, auto insurance rates might be lower if you have good credit. In fact, a study found that dropping one credit tier can increase car insurance premiums by an average of 17%. That's an extra $170 per $1000 of premiums per year. Further, the same study found that drivers with poor credit scores (lower than 580) pay nearly twice as much for auto insurance than those with exceptional credit (800 or more).
Home insurance rates can also be affected by your credit score, with separate analysis showing that those with poor credit pay and average of 72 percent more for home insurance than those with good credit.
So, those with high credit scores are likely to pay less for car insurance premiums vs. those with good credit and 1/2 as much as those with poor credit. And home insurance savings can be as much as 72%. So, better credit = lower insurance costs.
You’ll Have an Easier Time Renting
A high credit score won't lower your rent. It likely will help you get the apartment you want, as landlords and property managers check your credit score when you put in a rental application. If you have a low credit score, they may not approve you or, more likely, they’ll require a higher security deposit in order for you to get the apartment you want.
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It Might Help You Get a Job
A high credit score can help you go from applicant to employee. In roles that require you to handle money or deal with sensitive information and employer will likely check your credit score as a part of a final applicant screening process. A low score can be a red flag that would prevent an applicant from getting a job. To an employer, having a high credit score shows that you can be responsible with borrowing, and they assume that means you’ll be responsible in other ways too.
Good Credit Will Make it Easier & Cheaper to Get Utility Service
Each time you apply to open a new utility account (for electricity or gas service, for example), they will check your credit score. Applicants with bad credit will be required to provide an up-front security deposit in order for service to be turne don. This can be one to two months of average service costs, for each utility. So, low credit will tie up hundreds of dollars in security deposits for the term of your service.
You Could Get Better Terms on Your Cell Phone
Cell phone service plans are, generally, the same rate regardless of credit. That said, bad credit will impact your ability to finance a new phone. Carriers run credit checks to evaluate risk when you want to finance a new phone. If you have bad credit you would likely be required to pay a significant up-front deposit or pay for the phone in full vs. likely getting 0% financing if you have good credit.
What This Means for You
Protecting and maintaining a strong credit rating will save you money and open you up to more financial opportunities.
Your credit score is made up of a variety of factors. Three keys are
- Pay your bills on time
- Don't be late with any payments
- Stay within your means - don't over extending your debt.
By sticking to these principles and protecting your high credit rating, you'll save more and have more opportunities to use your money wisely.
Other Articles Of Interest:
Make sure to check out other great articles about money management and ways to save, including:
The "No Spend Challenge". Does It Work?
How Much More Expensive Is Everyday Life in 2026 vs. 2021
Why Most Budgets Fail After 30 Days and How to Succeed
Why Americans Feel Broke, Even When Incomes Are Rising
Sources:
https://www.equifax.com/personal/education/credit/score/articles/-/learn/benefits-of-good-credit/
https://www.creditkarma.com/credit_cards/rewards-cards
https://www.bankrate.com/credit-cards/advice/how-to-get-800-credit-score/
https://www.thezebra.com/resources/research/credit-impact-car-insurance-by-state/
https://www.nerdwallet.com/insurance/homeowners/learn/credit-score-home-insurance-rates
https://www.cnbc.com/2026/04/26/insurance-rates-credit-history.html
https://consumer.ftc.gov/getting-utility-services-why-your-credit-matters
https://www.att.com/blog/prepaid-phone-plans-vs-postpaid-phone-plans/
https://www.boostmobile.com/boost-blog/industry-insights/prepaid-vs-postpaid-plans
https://www.experian.com/blogs/ask-experian/what-credit-score-do-you-need-to-rent-an-apartment/
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