In 2026, your credit score might be more important than ever. With household prices rising and interest rates remaining at stubbornly high levels, getting approved for the loans you need at a cost you can afford is critical.
A credit score is a three-digit number that typically ranges from about 300 to 850, depending on the model used. Lenders consider your credit score an approximation of how likely you are to repay borrowed money, according to Kiplinger. Scores in the “good” range, generally around 670-739 for FICO models, mean you’re viewed as less risky.
Good credit scores can translate into real benefits in terms of interest rates, loan approvals, insurance costs and more. Here are some of the specifics.
Higher credit scores make it easier to get approved for loans and credit cards. A good credit score is a message to lenders signaling you are reliable in terms of handling your finances and paying back money you owe. Even better from a consumer standpoint, as a lower-risk borrower, lenders will be more willing to compete for your business, meaning you’re likely to have more options when it comes to picking and choosing your loans.
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In addition to getting approved for a wider variety of loan options, a strong credit score also gives you access to lower interest rates. As lenders prefer working with lower-risk customers, they reward them with better pricing in the form of significantly lower mortgage rates, cheaper auto loans and more favorable APRs on credit cards.
Lower rates are particularly important when it comes to home mortgages, as those loans typically last 30 years and amount to hundreds of thousands of dollars. Over the life of such a large loan, even a fraction-of-a-percent difference in rate can literally save you tens of thousands of dollars.
Even with credit cards, however, the significance of a good credit score can’t be overstated. With better credit, you’re more likely to get approved for the best cards with the biggest introductory offers and the lowest interest rates.
Did you know your credit can affect insurance premiums? According to Discover, this is just one of many benefits of having a higher credit score, and it’s one that’s often overlooked.
While not applicable in all states, many auto and homeowners insurers use credit-based scores to help gauge risk. Generally, a higher credit score can lead to lower premiums, because data shows consumers with strong credit tend to file fewer claims.
