(BPT) - You may check your bank balance daily, your savings accounts regularly and you probably know roughly how much cash is in your wallet. But if someone asked you what your credit score is, would you be able to answer? Your credit score is an important tool in building wealth in ways you may not even realize, so it's important to not only know what it is, but take proactive steps to maintain it.
"A credit score is more than just a number; it's one of the main keys to financial success," says Barrett Burns, president and CEO at VantageScore Solutions, a credit score model developer used across auto, banking and credit card industries. "Benefits of a good score go far beyond qualifying for a loan to really help build wealth now and in the future."
Burns shares five ways a strong credit score can help you transform your finances and position yourself for success throughout life:
Qualify for a mortgage
Many financial experts agree that a mortgage is a key strategy to build wealth long term. With a strong credit score, you can qualify for a mortgage, which helps you get the home you want and start building equity. You'll also qualify at a lower rate with a rich credit history of on-time payments and positive debt management.
Access premium credit cards
Some credit cards are selective on who qualifies. This is because they may have a special program with exclusive offers, cash-back and other rewards that can add up fast. When you have a good credit report you are more likely to qualify for the best credit cards for your personal needs so you can optimize your personal finances.
Receive better interest rates
Shop around, different lenders could give you different rates. When you have a good credit score, you may qualify for much better terms on loans. That lowers interest rates on things like car loans. Depending on the size and length of the loan, a low interest rate can save you hundreds or even thousands of dollars over the life of the loan.
Get negotiating power
Don't like the loan terms offered to you? When your credit score is high and you have a good credit history, you have leverage to try to negotiate better loan terms, including lower interest rates. Ask for better terms noting your great credit score and let the lenders make you a deal.
Have options during emergencies
Sometimes the unexpected happens and can throw your finances off track. Having a good credit score can help you leverage financial options that you may not have access to otherwise. This can relieve stress and help you avoid losing any more money than necessary.
VantageScore credit scoring models provide lenders and consumers with highly predictive credit scores that are easier to understand and score more people. You can access yours for free through the providers at vantagescore.com.