9 Benefits of Good Credit | Credential Index

9 Ways Good Credit Can Make Life Easier — and Save You Money

Good credit can help you borrow money more cheaply, qualify for credit cards, have lower insurance costs and more.

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Edited by other Updated Jan 1, 2026 There’s no way around it: Good credit is important. A good credit history shows potential lenders that you have a track record of repaying borrowed money as agreed. That can reassure them that you're likely to do so in the future and are a desirable customer. A solid credit history can also be important to potential landlords, employers and, in many states, insurers. Here's a look at how good credit can benefit you.

1. Borrow money at a better interest rate

Scores above 740 typically qualify for the lowest mortgage rates available. Higher credit scores also can get lower interest rates on car loans. Lenders also consider things like your debt-to-income ratio, but in general, a good score and adequate disposable income position you well. You can shoot for the highest credit score if you'd like, but it's unlikely to get you better terms than any other score in the excellent range.

2. Eliminate the need for a co-signer

A higher credit score demonstrates you have a successful history of paying debts back on time, which means you don’t need a co-signer to vouch for you.

A co-signer can help improve loan terms if you have poor credit, but the co-signer also takes on full financial liability of your loan. That means that if you fail to repay the loan, your co-signer is on the hook. A strong credit score can reduce the need to rely on a co-signer to get the most advantageous loan terms. to vouch for you.

A co-signer can help improve loan terms if you have poor credit, but the co-signer also takes on full financial liability of your loan. That means that if you fail to repay the loan, your co-signer is on the hook. A strong credit score can reduce the need to rely on a co-signer to get the most advantageous loan terms. to vouch for you.

A co-signer can help improve loan terms if you have poor credit, but the co-signer also takes on full financial liability of your loan. That means that if you fail to repay the loan, your co-signer is on the hook. A strong credit score can reduce the need to rely on a co-signer to get the most advantageous loan terms.

3. Qualify for the best credit card deals

A strong credit history can help you qualify for the best credit cards, which include low interest rates, rewards and cash back. As well as helping you save money, these perks will encourage you to keep using your credit card — which can help your credit if you continue to pay on time and keep balances low compared to your credit limits. A low- or no-interest credit card can also serve as a temporary emergency fund if the need arises, or it can allow you to take advantage of a business opportunity.

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4. Refinance at better rates

If you want to refinance a loan, such as a private student loan or home mortgage, getting the lowest possible interest rate makes the refi process worth it. But to get the lowest rates, you’ll need good credit. Strong credit may also give you access to more flexible loan terms when refinancing, negotiating power and a broader selection of refinance lenders to choose from.

5. Get favorable terms on a new cell phone

Smartphones or cell phone upgrades can be expensive. But a good credit score may allow you to finance a phone at 0% interest. For example, Apple offers new phone financing through its own credit card or a loan from Citizens One Bank. The card and the loan both require a credit check for approval.

6. Improve your chances of renting a home

Much like a potential lender, a landlord may want to check your credit. How you've handled credit and payments overall gives insight into how likely you are to pay your rent on time every month. If your record has too many negative marks, getting that dream apartment may be difficult. Even if you’re able to rent with bad credit, your landlord may charge a higher security deposit or request a co-signer on the lease.

7. Receive better car and home insurance rates

In order to predict potential losses on customers, some car insurance companies factor in credit-based scores when determining monthly premiums in states that allow this practice. You can't be turned down altogether on the basis of credit, but you're likely to pay higher premiums if your credit score is too low. In most states, blemished credit can also make homeowners insurance and renters insurance more expensive.

8. Skip utility deposits

Before taking you on as a customer, a utility company might look at your credit report to get a sense of your payment history. If your credit history isn’t up to snuff, the utility company may require a deposit or ask for a letter of guarantee, in which a friend or family member agrees to pay your bill if you don't.

9. Get a job

In some states, employers can request your credit report as part of your job application. You will know if they do; your consent is required. Because the effects of good credit can be felt in so many parts of your life, it’s important to do what you can to help your credit. Paying your bills on time is a big part of the recipe, as is keeping credit card balances to less than 30% of your credit limits, and lower is better. Explore more on About the author Barroso Amanda Barroso, Ph.D., is a writer and content strategist helping consumers navigate budgeting, credit building and credit scoring. Before joining NerdWallet, Amanda wrote about demographic trends at the Pew Research Center and earned a Ph.D. from The Ohio State University. Her work has been featured by the Associated Press, Washington Post and Yahoo Finance. Published in 1. Borrow money at a better interest rate 2. Eliminate the need for a co-signer 3. Qualify for the best credit card deals 4. Refinance at better rates 5. Get favorable terms on a new cell phone 6. Improve your chances of renting a home 7. Receive better car and home insurance rates 8. Skip utility deposits 9. Get a job Average Credit Score by Age: Where Do You Stand? 700 Credit Score: Is It Good or Bad? How to Calculate Your Credit Utilization Ratio What Is a Good Credit Score and How Do I Get One? 7 Ways to Rebuild Credit By Bev O'Shea, Amanda Barroso, Lauren Schwahn How to Build Credit From Scratch at Any Age By Amanda Barroso Credit Score Ranges: What They Mean and How They Work By Amanda Barroso, Lauren Schwahn How to Calculate Your Credit Utilization Ratio By Amanda Barroso What Is a Good Credit Score and How Do I Get One? By Amanda Barroso, Lauren Schwahn