Your credit score affects so many important aspects of your life, from your personal finances to your ability to work and live where you want. Having a good credit score can also save you hundreds or thousands of dollars annually in interest, insurance premiums, cell phone plans and more.
It pays to monitor your credit score on a regular basis so you know where you stand. Here are eight reasons you need to pay attention to your credit score.
1. It helps you qualify for a loan
Lenders take a hard look at your finances before they extend you a mortgage, auto loan, personal loan or other form of credit. They may review your income, the information in your credit report and your credit score.
If your credit score is too low, your loan applications could get rejected. It’s a good idea to monitor your credit score, and build your credit when necessary, to make sure it falls within a desirable range. Curious what constitutes a good credit score? Check out our article on credit score ranges.
2. You can get better credit cards
There are credit cards out there for just about every type of credit score. But the better your score, the better the credit cards you can qualify for. If you want a premium credit card — or just a solid cash back rate with low fees — you’ll probably need a credit score in the good-to-excellent rage.
3. The better your score, the lower your interest rates
Your credit score doesn’t just help lenders and creditors decide whether to do business with you. It also helps them determine the interest rates you’ll pay on their financial products. Generally speaking, the better your credit score, the lower your interest rates for loans and credit cards. Low interest rates can save you hundreds or thousands of dollars in the long run.
4. You could net cheaper insurance
Did you know that your credit score actually helps determine how much your insurance costs? Whether it’s car insurance, life insurance, homeowners insurance or health insurance, people with poor credit tend to pay higher monthly premiums.
Insurance providers don’t see the same credit score as traditional lenders. Instead, they see a credit-based insurance score, which looks at a combination of your insurance history and certain items in your credit report. Some states don’t allow certain types of insurers to use your credit score to determine their rates, so check your local laws.
5. Negative items could appear on any credit report
A dip in your credit score is a telltale sign that a negative item has landed on your credit report. This could mean you forgot to pay a bill, you have an account that went to collections or you declared bankruptcy. It could also mean that due to an error or even identity theft, inaccurate information is landing on your credit file. (Here are a few other ways to tell your identity has been stolen.)
If the negative item is legitimate, it’s helpful to know how it’s affecting your credit. If it’s incorrect, you should try to have it removed from your credit report ASAP by disputing the item with the credit bureaus.
6. You’re looking for your dream apartment
To avoid renting to someone who won’t pay their rent, landlords and property management companies often require credit checks for potential renters. While the fairness of this practice is open to debate, the fact remains that a poor credit score can prevent you from getting into your dream apartment. If you know your credit score ahead of time, you can take steps to improve it before you submit a rental application.
7. You’re on a job hunt
Some employers perform credit checks on job candidates before extending a job offer. While they can’t check your credit score, they will pull your credit report (though they won’t see the same information a lender or creditor would).
Not all companies do this, and several states have laws prohibiting the practice or limiting how much information the employer can see. But it’s a good idea to know your credit score and check your credit report before you begin a job hunt so you at least have an idea of how you might look to potential employers.
8. You’ll learn more about credit
Even if your aren’t planning to apply for a loan, take out an insurance policy or find a new job, it’s a good idea to be familiar with your credit score. You can look out for dips or watch it improve over time, and be prepared the next time someone is about to check your credit.
You can pull your credit reports for free every 12 months at AnnualCreditReport.com. Those reports won’t come with your credit score. You can purchase them at the time for a nominal fee. However, you can check your credit score for free each month on credit websites, like Credit Sesame, or via certain credit card issuers.
Looking for more life hacks? We’ve got a roundup of 25 apps or tools that can make life easier.
This article originally appeared on Policygenius.com.