When given the opportunity to save a little bit of cash, most people jump at the opportunity. Using coupon codes when you shop online, checking out the sale rack, and signing up for loyalty programs are all easy ways to save a few bucks.
Having a great credit score is another easy way to save what can amount to thousands and thousands of dollars over the course of your life. And with Fizz, building your credit score early in adulthood is easier than ever. But a lot of people miss out this surefire way to save tons of money. So let’s explore exactly how having a great credit score can save you money, and what you can do to achieve your credit score goals.
Why is my credit score important?
As we’ve talked about before, your credit score is your financial reputation, summed up as a number. While your credit profile as a whole will paint a more complete picture, your credit score is almost always what potential lenders will look at first.
Having an excellent, great, or even good credit score (usually 670 and above) sends a signal that you’re responsible with money. As a result, people will typically be more likely to lend you money - whether that's to buy a cellphone, buy a car, or even buy a house. They’ll also be more likely to rent you an apartment, or even hire you at their company. Having a solid credit score is never a bad thing - at the very least, it shows that you’re responsible.
Saving money on loans
When you want to borrow money for a big purchase, one of the first things you have to do is submit to a credit check. If your score is good, great, or excellent, you’re usually good to go onto the next step. But if you don’t have a good enough credit score, you can be laughed out of the room, left with no loan at all. This experience can be embarrassing, but it’s also a pain. If you’re rejected from getting a loan just based on your credit score, you’ll have to look even harder to find a lender who isn’t concerned with your score. This can cost you money, and can take up a lot of extra time.
Assuming you do find someone willing to lend you money for your new home, your new car, or even your education, the next step is determining the appropriate interest rate. Simply put, the higher your credit score is, the less you’ll be charged for borrowing money. For example, a 780 credit score might get you an interest rate of just 1.5%, whereas a lower credit score of 580 might come with an interest rate closer to 8.5%. That’s a huge difference, and that higher interest rate will cost you tons of money over time as you pay back your loan. Having bad or no credit is expensive!
Some people might look at this and use it as an example as to why you should never borrow money. But sometimes borrowing money just makes sense. It’s unlikely that you can pay for an entire home or an entire car upfront. And you shouldn’t have to. Building credit with Fizz is free and virtually risk free. You should have the option to take advantage of an awesome credit profile - if you choose to.
Saving money on everything else
Interest rates on loans are the more direct example of how having a good credit score can save you money. But what about when it comes to getting approved for an apartment rental, or even getting a new job? Neither of these examples require you to borrow money, so you won’t need to worry about interest rates. But your credit score can still be a big factor.
When you apply for an apartment rental, most landlords will run a credit check - just to make sure that your financial reputation is decent. With little to no credit history or a low credit score, you might find yourself getting denied for some of the best apartments you find. You might find yourself forced to live in a more expensive unit, or you might not be able to get an apartment at all.
The same is true for some job opportunities. While not every business will check your credit, it’s not unheard of for people to have job offers rescinded due to low or nonexistent credit scores. That means missing out on salaries and taking extra time off to find a new job that doesn’t check your credit.
Fizz to the rescue
We know - it’s annoying and unfair that the system is set up this way. If you have the money to make monthly payments on a loan, make rent payments on time, and the skill set to do a job you’ve been offered, why should it matter what your credit score is?
While there’s more to who you are than your financial reputation, lenders, landlords, and bosses don’t always see it this way. But that’s why we created Fizz. WIth a Fizz card, you can build credit during college by spending money the way you normally do. And to make things even better, you won’t have to worry about fees, interest, or overspending.
Fizz also doesn’t run a credit check when you apply. We think that everyone should have the opportunity to build credit during college - even if you don’t have credit to begin with, even if you’re an international student, and even if you don’t feel like you know too much about your finances. Fizz is here to help you get ahead, stay ahead, and prepare for your financial future. So download the Fizz app and get started building credit today!
Sam is a Kenyon College alum and is head of content at Fizz. He's been a go to personal finance resource among his peers since getting his first credit card during his sophomore year of college. He hails from Washington, DC, loves all things aviation, and currently lives in Los Angeles.