It is common knowledge that bad credit means higher interest rates. If you have had a history of being late on your monthly bills, are running a large balance on your credit cards, or maybe even have filed for bankruptcy, your credit score has suffered. When you apply for a new car loan or need to re-finance your mortgage, your lender looks at your credit report, sees the low FICO score, and socks it to you. They feel you are a credit risk, so they charge you a higher interest rate (sometimes a much higher rate). And each percentage point increase in your interest rate equates into bigger monthly bills for you. Fix your bad credit, and in time, the interest rates will fall. But you knew that. This article shares some unadvertised benefits of credit repair that you might not have known.



Unadvertised benefit #1: Lower insurance premiums. The insurance companies have convinced themselves that a higher credit rating means people will be less likely to file claims on their insurance policies. So people with good credit are paying less in insurance premiums than you are, year after year. This is true for everything from auto insurance and health insurance, to homeowners insurance.

Unadvertised benefit #2: A better job. More and more employers are doing credit checks on job applicants before hiring them. While the employers may get your credit report to verify information that you put on your job application, what is to stop them from seeing how you handle your financial affairs, too? Those with good credit reports will avoid potentially embarrassing explanations at the job interview. It would be a shame to lose out on a good-paying job just because you were late on some credit card payments.

Unadvertised benefit #3: Lower deposits. If you are renting an apartment you can bet your landlord will check your credit rating. Those with good credit may well pay a lower security deposit. It can be assumed that this applies to a variety of other service providers too. Did you have to put down a deposit with the electric utility or phone company before they would hook up service?

Unadvertised benefit #4: Lower fees. Some people call them "nuisance fees" but they can really add up. Are you paying a monthly fee for your checking account? How about a high "processing fee" when you apply for a credit card? Families with a high credit rating will get free checking. They seldom pay "application fees" when opening a new credit account. And they are much more likely to be able to talk their lenders out of late-pay fees than you. These extra fees are just another way that lenders hedge their bets with dealing with folks with a poor credit rating.

How can you reap the benefits of good credit? Make a plan to reduce your overall debt, and be sure to pay your all your monthly bills on time. Of course, that's just a start. There are many more techniques you can employ to fix your problem credit. But in the end you'll find your money goes much further when you have a good credit rating.