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You probably already know that your credit score is important when you apply for certain types of financial products like credit cards and loans. Lenders and credit card issuers use credit scores to help predict risk. The higher your credit score, the more likely you are to qualify when you apply for financing. 

Yet the benefits of a good credit score could go far beyond the ability to qualify for more credit cards and loans. Having good credit offers other perks that you might not realize exist. Here’s what you need to know to start putting your good credit score to work for you.

What Is a Good Credit Score? 

man checking credit score on mobile phone


FICO® Scores range from 300 to 850. In general, a FICO score of 670-739 is considered a good credit score. FICO Scores that range from 740-799 fall into the “very good” category. Finally, the top category of FICO Scores (800-850) are classified as “exceptional” or "excellent." 

According to the credit bureau Experian, 67% of American adults have a good FICO Score or higher. And as of April 2023, the average FICO Score in the United States was 718. 

1. Lower Interest Rates

A good credit score not only makes it easier to qualify for credit cards and loans, but it could help you qualify for more attractive financing offers as well. In general, lenders and credit card companies reserve their lowest interest rates for well-qualified applicants (aka those with higher credit scores, low debt-to-income ratios, etc.). 

You typically don’t need a perfect credit score to qualify for the best deals that credit card issuer and lenders have to offer. But with good or excellent credit, you’re more likely to be eligible for a wider variety of financing options—including 0% APR credit card offers and premium credit cards if you’re interested in such products. 

2. Higher Credit Limits

When you qualify for a new credit card, the card issuer may also review your credit score to determine how much money it’s comfortable allowing you to borrow at a given time (aka your credit limit). A good credit score could give you access to higher credit card limits. Bad credit, by comparison, could limit your access to financing. 

On a positive note, if you start out with credit cards with lower limits you can work to improve your credit scores. If you’re successful, you could come back and ask your credit card issuer to increase your credit limit in the future. 

3. Better Credit Card Offers and Loans

Credit card companies and lenders commonly set criteria that applicants must meet to borrow money. Satisfying a minimum credit score is typically part of the process. 

For example, the best travel rewards credit cards often require applicants to have a good credit score (perhaps an excellent credit score) to be eligible for a new account. There are credit cards for bad credit, but these accounts don’t tend to have the same generous benefits and features

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Other lenders may also use credit score minimums to screen loan applicants. The best personal loans, for example, are typically only accessible if you have a good or excellent credit score. And the same rule applies to mortgages. The minimum FICO Score you need for most conventional mortgages is around 620. However, lenders that issue government-backed home loans, like FHA loans and VA loans, may accept borrowers with FICO Scores of 580 or lower. 

4. Lower Insurance Premiums

Another perk of good credit that many people overlook is the potential to save money on your insurance rates. In many states, the price of your car insurance and homeowners insurance may go up or down based on your credit score

Many insurance companies use credit-based insurance scores to assess risk when providing quotes to potential customers. Your credit information can help an insurer determine the likelihood that you’ll file a claim in the future—a claim that could cost the insurance company money. 

Insurance companies place a lot of trust in the predictive power of credit scores. You might have a completely clean driving record. However, if you have a bad credit score, you could still pay a higher insurance rate than you would otherwise. One study found that a bad credit score could add an average of over $1,300 per year onto the cost of car insurance premiums for drivers in Kansas, and a staggering $3,826 for insured drivers with bad credit in Florida.

5. More Housing Choices

Whether you decide to rent an apartment, lease a home, or apply for a mortgage, your credit score is likely to come into play in each scenario. Landlords and property managers typically review the credit history and credit score of prospective renters. Likewise, if you purchase a home, a thorough review of your credit reports and scores will be part of the mortgage application process.

Good credit can make securing housing easier and more affordable whether you decide to rent or buy. Down payment and security deposit requirements are often lower for applicants with higher credit scores. Plus, you’ll need to satisfy minimum credit score requirements to qualify for a mortgage or to lease an apartment in the first place

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Next Steps

credit score companies on phone


Good credit can save you money and make your financial life easier to navigate in many ways. So, if your credit score isn’t as strong as you would like it to be, it’s in your best interest to take action.

If you want to improve your credit score, a great place to start is to check your credit reports from Equifax, TransUnion, and Experian. As you review your credit reports, make a note of any incorrect or questionable information you find. You can dispute errors on your credit reports thanks to the Fair Credit Reporting Act.

Another possible way to boost your credit scores is to pay down your credit card debt. This smart financial move can also help you save money on credit card interest. 

Depending on your situation, the changes above (and others) may not help you recover from a credit catastrophe immediately. Just like getting back into a workout routine, credit tends to improve in an incremental fashion—little by little. Still, as you make progress toward a better credit score, you may start to enjoy more and more of the benefits above over time.


Michelle Lambright Black

Michelle Black is founder of and Michelle is a leading credit card journalist with over a decade and a half of experience in the financial industry. She’s an expert on credit reporting, credit scoring, identity theft, budgeting, small business, and debt eradication. Michelle is also a certified credit expert witness and personal finance writer.