Good credit can help you borrow money more cheaply, qualify for credit cards, have lower insurance costs and more. Read on to learn more, then compare our top credit card picks for building credit.

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Scores above 740 typically qualify for the lowest mortgage rates available. Higher credit scores also can get lower interest rates on car loans. Lenders also look at things like debt-to-income ratios, but in general, a good score and adequate disposable income position you well. You can shoot for the highest credit score if you'd like, but scores within the “excellent” range (720 and up) are likely going to secure about the same terms; meaning, a perfect score of 850 probably won’t secure you better terms than any other score in the “excellent” range.

A strong credit history can help you qualify for the best credit cards, which include low interest rates, rewards and cash back. As well as helping you save money, these perks will encourage you to keep using your credit card — which can help your credit if you continue to pay on time and keep balances low compared to your credit limits. A low- or no-interest credit card can also serve as a temporary emergency fund if the need arises, or it can allow you to take advantage of a business opportunity.

Smartphones or cell phone upgrades can be expensive. But a good credit score may allow you to finance a phone at 0% interest.

Much like a potential lender, a landlord will want to check your payment track record by taking a look at your credit. This gives insight into how likely you are to pay your rent on time every month. If your record has too many negative marks, getting that dream apartment may be difficult. Even if you’re able to rent with bad credit, your landlord may charge a higher security deposit or request a co-signer on the lease.

In order to predict potential losses on customers, some car insurance companies factor in credit-based scores when determining monthly premiums in states that allow this practice. You can't be turned down altogether on the basis of credit, but you're likely to pay higher premiums if your credit score is too low. In most states, blemished credit can also make homeowners insurance and renters insurance more expensive.

Before taking you on as a customer, a utility company might look at your credit report to get a sense of your payment history. If your credit history isn’t up to snuff, the utility company may require a deposit or ask for a letter of guarantee, in which a friend or family member agrees to pay your bill if you don't.

In some states, employers can request your credit report as part of your job application. You will know if they do; your consent is required. Because the effects of good credit can be felt in so many parts of your life, it’s important to do what you can to help your credit. Paying your bills on time is a big part of the recipe, as is keeping credit card balances to less than 30% of your credit limits, and lower is better.

Up to $86,065 in interest on a $350,000 mortgage with a credit score of 750 or above, compared with someone scoring 630-689, according to NerdWallet calculations using interest rates for a 30-year fixed-rate loan in July 2023.

Up to $3,251 in interest on a five-year, $41,000 auto loan with a score of 720 or above, versus someone scoring 660-689, from FICO calculations using July 2023 rates.

Up to $885 in interest on a three-year personal loan of $10,000 when scoring 720 or above compared to someone scoring 630-689, based on anonymized offer data from NerdWallet's lender marketplace.