The average FICO credit score has increased by 27 points since 2010 and reached an all-time high of 716 in 2021.

According to a report from the credit bureau Experian, there has been a noticeable increase in credit scores for consumers across all generations in recent years, from Gen Z to the silent generation (age 74+). The majority of American consumers now score in at least the "good" range or higher.

This is great news because a good credit score can potentially help you save money in the long run.

Below, Select breaks down the major advantages of having a good credit score, with insight from Bruce McClary, a spokesperson for the National Foundation for Credit Counseling (NFCC).

1. You'll have an easier time renting an apartment

According to Experian, a credit score of 620 is often the minimum credit score you need to qualify for an apartment. This falls into the "fair credit" range for both FICO and VantageScore's rating scales (at 580 to 669 and 601 to 660, respectively).

But some landlords and property management companies are stricter than others. If your credit score is 700 or above, it's more likely that the rental application process will be easier since your good score can help you stand out to potential landlords.

Depending on the scoring model used, a good credit score falls between the following ranges:

  • FICO: 670 to 739
  • VantageScore: 661 to 780

Having a good credit score when you apply for an apartment can also protect you from needing to find a cosigner or paying a large security deposit, as some landlords require when a potential tenant has less-than-great credit. 

2. You'll get the best rates on car and homeowners insurance

According to McClary, having a good credit score can help you save money on your car and/or homeowners insurance.

Most U.S. states allow credit-based insurance scoring, where insurance companies assess your risk based on how well you handle your money.

A variety of other factors go into evaluating your rates, and insurance companies don't rely solely on your credit score in the underwriting process. They cannot penalize you for a bad score by raising premiums, denying coverage or canceling your policy.

But according to the insurance company Nationwide, credit-based scoring results in the most fair assessment of a driver's risk — and the company reports that it actually lowers premiums for about half of its customers.

Getting a free quote from an insurance carrier is the most accurate way to see whether your credit score might bring you savings. You can also view your credit-based insurance score through LexisNexis.

(Note: Credit-based auto insurance scoring has been banned in Hawaii, while credit-based home insurance scoring has been banned in Maryland. The practice has been banned entirely in Massachusetts and California.)

3. It's cheaper to borrow money

If you ever want to get an auto loan, remodel your house or open a business, having a good credit score will qualify you for lower interest on nearly every kind of personal loan you might need.

"A high credit score means that you will most likely qualify for the lowest interest rates and fees for new loans and lines of credit," McClary says.

And if you're applying for a mortgage, you could save upwards of 1% in interest. This could mean saving at least $200 per month over the lifetime of a 30-year mortgage on a $300,000 house.

If you're looking for a personal loan, Select rated LightStream, the online lending arm of Truist Bank, as one of our top picks. It offers low interest rates for people with good credit and provides loans for almost every purpose. It also does not charge any origination fees, administration fees or early payoff fees.

4. You'll be better prepared for the future

When you have a good credit score, you're more likely to meet lending approval guidelines and borrow money when you need it most, explains McClary.

This can help if you're ever in a pinch and need to open a credit card. You're more likely to qualify for a 0% APR card like the Citi Simplicity® Card (see rates and fees). During a life-changing transition, such as a move or home remodel, you can take advantage of 0% intro APR for 21 months on balance transfers from the date of first transfer and 0% intro APR for 12 months on purchases from the date of account opening (then 19.24% - 29.99% variable APR; balance transfers must be completed within 4 months of account opening). There is an introductory balance transfer fee of 3% or $5, whichever is greater for transfers completed within the first 4 months of account opening. After that, your fee will be 5% of each transfer (minimum $5).

5. You can access perks and enjoy the best rewards

It's no secret that the best rewards credit cards require at least good credit. And McClary says there are other perks, as well.

With a good credit score, "you can also take full advantage of the best introductory offers and reward incentives on new credit cards," says McClary. "Some higher tier credit cardholders are able to receive special invitations to exclusive events, free access to online streaming services and even free swag."

One of Select's best credit cards for sports fans, restaurant lovers, movie buffs and adventure seekers is the American Express® Gold Card. Cardholders can earn 4X Membership Rewards® points on restaurants (including takeout and delivery, plus, Uber Eats purchases) and at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X), 3X points on flights booked directly with airlines or on, 1X points on all other purchases (terms apply).

6. You'll develop a good reputation

A person with a good credit score doesn't have to look far for offers — in fact, the offers come to you when your credit score shows you're a trustworthy borrower. This comes in handy when you want to refinance existing debt, take out a personal loan or upgrade to a better credit card with your current issuer.

And beyond credit products, good credit habits follow you into the workplace. In the states that allow it, employers often pull consumer credit reports to make decisions about who to hire, promote and reassign — particularly if the job comes with the responsibility of making top-level financial decisions.

There are limitations as to what your employer can see under the Fair Credit Reporting Act, and they won't see your exact credit score. But with your signed permission, employers can legally access your credit report and see information like your open lines of credit (such as mortgages), any outstanding balances, your total amount of auto or student loans, past foreclosures, late or missed payments, your bankruptcies (if any) and balances that have gone to collections.

So while employers can't see your actual score, they will see most of the information that comprises your score.

The most important habit for achieving a good credit score

If you want to build credit and improve your score so you can experience the benefits of good credit for yourself, McClary says the most important habit is is simple — pay your bills on time. 

"A history of timely payments is the single biggest factor in determining your credit score according to FICO," McClary advises. "Bringing past-due accounts up-to-date and keeping them there should be a priority for anyone who has been struggling because of delinquent accounts."

Bottom line

Nearly every facet of your financial life is impacted by the strength of your credit score, from loan and mortgage applications, and even something as essential as a lease on a new apartment. A good credit score can also qualify you for the best introductory offers and rewards credit cards with VIP perks like concert ticket presales, exclusive events and even, in some cases, luxury concierge service (read more about the Black Card's elite rewards). 

If you need some support in building a good credit score, "nonprofit credit counseling agencies are a good resource for those who need help with a plan to get back on track with credit card and loan payments," McClary advises.

If you're interested in credit counseling, be sure to ask whether it is a for-profit or a nonprofit company and ask about the credentials of the staff. You may want to consider speaking to a debt-relief law firm if your debt has gone to collections, you're facing tax or legal concerns and you need guidance about your rights under the law. But a credit counselor or financial coach might be most appropriate if you need a budgeting plan, accountability and encouragement to pay things off before they get too out-of-hand.

If you opt to work with a coach or a planner, you should look up their qualifications and make sure they have the legitimate education and training to help you reach your goals. The most rigorous certification is the Certified Financial Planner, or CFP. You can find a CFP professional in your community by searching the CFP Board's search website, but CFPs typically earn a fee or commission based on your investments.

If getting out of debt is your starting point, you can begin with a counselor or nonprofit organization, which should never charge you exorbitant fees.

Here are some common credentials you will see for legitimate businesses and individuals:

  • Certified Financial Education Instructor – Financial Literacy Certification (CFEI)
  • Certified Personal Finance Consultant (CPFC)
  • National Foundation for Credit Counseling® (NFCC®) - Certified Financial Counselors (search for a member agency)
  • CFE Certified Financial Educator® or CFEd®

You can also check your credit card statement for a 1-800 number to call for information about credit counseling.

For more information, we recommend you read the FTC's advice about choosing a credit counselor.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.