3 Surprising Things a Higher Credit Score Could Do for You

Some people don't think much about their credit scores until they're ready to borrow money. But it's a good idea to keep tabs on yours, since you never know when that need might arise. And the higher your credit score, the easier it becomes to borrow more affordably. 

If you're signing a 30-year, $200,000 mortgage, for example, a higher credit score might leave you with an interest rate of 6.4%. A lower credit score might leave you paying 6.8% interest on that loan instead. That's a difference of $54 a month, or over $600 per year.

When we discuss having a higher credit score, in the context of FICO, the most commonly used scoring model, that usually means a score in the upper 700s or 800s. A score of 850 is perfect, so your score can't climb beyond that point. But the closer you get, the more borrowing options you're apt to have.

But a higher credit score won't just make it more likely that you'll get approved for a loan, or snag a lower interest on one. Here are a few surprising things a higher credit score can do for one.

1. Save you money on car insurance

Credit scores usually come into play in the context of borrowing money. A higher score tells a lender you can be trusted to repay your loan on time. When a lender is giving out a loan, it's easy to see why they'd want that reassurance.

Car insurance is a whole different beast. When you apply for auto insurance, you're not borrowing money. What you're doing is paying money for a service, kind of like how you hand the cashier at the supermarket money and they let you bring your groceries home. 

But believe it or not, your credit score could play a role in the rate an auto insurer offers you. People with higher rates tend to be viewed as safer drivers. So boosting your credit could help you pay less to insure your car.

2. Leave you paying less for life insurance

Like auto insurance, life insurance isn't a loan -- it's a financial product you're buying to protect your loved ones. But Experian says that life insurers are increasingly checking on credit as part of the application process. And if you have good credit, you may be more likely to not just get approved for a policy, but also, snag a more competitive rate on your premiums.

To be clear, your age and health are more likely to impact your premium costs than your credit score. But if you can build up your credit and snag some savings on life insurance, why not?

3. Get a cellphone

You'd think the process of getting a cellphone would go something like this: Go to a store that sells cellphones. Pick the cellphone you want. Pay for your cellphone. Enjoy your cellphone.

The process could work that way as far as a new phone is concerned if you have the cash in your savings account to pay for a new phone upfront. But if you need to finance it, then your credit score will absolutely come into play, the same way it would for any loan or credit line you're opening. 

Also, a cellphone won't do you a lot of good if it's not associated with a wireless account. To get that, you'll also need good credit. 

Do you even know your credit score?

If you can't remember the last time you checked your credit score, you may want to give that number a look. These days, many banks and credit card companies give account holders access to their credit scores, so it may be easier to get that information than you'd think. All you most likely need to do is log into one of those accounts. 

Surprisingly enough, one place you probably won't find your credit score is your credit report. Your credit report will list your various outstanding loans and credit card balances, but usually not your credit score itself. That would just be too simple, wouldn't it?

How to boost your credit score

A higher credit score could clearly work to your benefit. To boost yours:

• Make sure to pay all bills on time
• Whittle down existing credit card balances
• Ask for credit limit increases as your income rises, but don't increase your spending to follow 
• Become an authorized user on someone else's long-standing credit card
• Check your credit report for errors, and dispute inaccuracies that paint you in a negative light

Even a modest increase in your credit score could result in surprise savings in different corners of life. It pays to keep tabs on your credit score and do your best to get that number as high as possible.