Looking at your credit score may not be on your top 10 list of things to do. You might not be thinking about applying for a loan, a credit card, or a new job. However, your credit score isn’t something you want to ignore. Checking your credit report and score at least once a year can help catch and correct errors and potential fraud.

It’s also a good idea to check your score if you do need to borrow money. Some of the most important financial moves you make in life are linked to that score. It’s what lenders, landlords, insurance and utility companies, and many employers use to determine whether you’re a risk. For this reason and more, read on to learn exactly why you should care about your credit score.

1. Lower Scores Mean You May Not Qualify for Loans or Credit Cards

The lower your credit score, the less chance you have of a lender approving your loan or credit card application. Even if you can afford the monthly payments, a lender can still deny your request because of a low score.

If you do get approved, you may only qualify for a subprime loan or high-APR credit cards. You may need to get a secured credit card in order to help potentially restore your credit. If you don’t have sufficient credit history, obtaining conventional loans and unsecured credit cards will also be more difficult.

Fewer financing and credit options can impact your ability to buy the house you want. When it comes time to get a new car, you’ll be limited as well. You may have to choose among less than desirable vehicles you can pay cash for. While you could find a co-signer, not everyone is willing to put their credit on the line. If friends and family know there’s a higher chance you won’t make payments on time, they’ll be more hesitant.

2. You’ll Get Higher Interest Rates With a Lower Score

When you apply for credit and a lender approves you, your credit score determines your interest rate. By qualifying for the lowest interest rates, you’ll pay less to borrow that money. You may not notice much of a difference with a credit card balance you pay off in a few months. However, with a 30-year mortgage, a lower interest rate will save you tens of thousands of dollars.

If you take out a $240,000 30-year mortgage at 2.518%, for example, you’ll pay $102,194 in interest. The same loan at 4.107% will cost you $177,834. You can use a loan savings calculator to determine how your score impacts interest with different types of home loans.

Lenders typically use FICO credit score ranges to assess your borrowing risk. A good score falls between 670 and 739, while a very good credit score is between 740 and 799. Scores of 800 to 850 are considered exceptional.    

3. You Could Pay More for Insurance and Utilities

Insurance companies typically check your credit report and score when you apply for a policy. This includes homeowners, auto, renters, and condo insurance. If your credit score is poor and doesn’t meet the insurer’s requirements, you could end up with a higher premium. Combined with other risk factors the company uses in its formula, you might miss out on discounts.

Unlike lenders, an insurance company probably won’t turn you away because of a bad credit score. But if your score remains low for years, you’ll shell out additional dollars each month that you could spend elsewhere. Higher premiums might prevent you from having enough discretionary income for retail therapy or the occasional vacation.

Utility companies also check your credit score when you request service in your name. A lower score won’t result in a higher rate for gas, electric, or water. What these companies may require instead is a deposit to start service. Your credit score range can also determine how much of a deposit you’ll need to put down. Whether it’s $50 or more than $100, that’s extra money you have to budget for moving expenses.

4. You’ll Have Fewer Wireless Service Options

Your credit score matters when you try to get wireless service and the devices that come with it. Scores that meet the carrier’s credit standards can qualify for postpaid or contract-based plans. With these plans, you may get slightly better prices with a wider range of voice and data options. For instance, a contract-based basic unlimited plan might have more minutes or higher data speeds than its prepaid counterpart.

Alternatively, some wireless carriers offer prepaid customers the same voice and data limits at a higher monthly price. Not every subscriber with a sufficiently high credit score opts for a contract. Some prefer the freedom that comes without an agreement to remain with one carrier for a year or two. But those with good credit scores have more options when they want or need to switch.

Solid scores can also give you finance options when it’s time to upgrade or purchase a new device. You’ll pay smaller monthly payments over time for costly, top-of-the-line phones. Without credit approval, you’ll have the choice to pay for the phone upfront or settle for a less expensive device.

5. You May Get Turned Down for an Apartment or a Job

Property management companies and apartment owners often check credit scores before they’ll give you a lease. Missed payments and high debt-to-income ratios might cause property managers to say no. This could leave you with fewer choices when apartment hunting.

Some potential employers will check your credit if you make it past the final round of interviews. That dream job you’ve been after could slip by if the organization isn’t pleased with your credit score. They may move on to the next qualified candidate or their second choice, especially if the job involves managing money.

Maintaining a Good Credit Score

Keeping your credit score as high as possible is imperative because it directly influences your quality of life. Lower scores jeopardize your ability to qualify for loans and credit, lower interest rates, and insurance discounts. You could also pay more to set up utilities and wireless services and lose out on housing and employment options. Maintaining a good credit score will ensure you keep your financial and lifestyle possibilities wide open.

Delaware Statutory Trusts (DSTs) are for the benefit of the investors. DSTs manages the property according to the investor’s legal needs, protect their rights in that property, and provide income to them over time. Simultaneously, the DST offers the most incredible flexibility for real estate investments and tax benefits through tax deferral within US Internal Revenue Code Section 1031 rules.

A delaware statutory trust 1031 allows you to sell a property without paying any capital gain taxes. A 1031 exchange is a real estate exchange where one property exchanges with a similar property during a sale transaction. DSTs are for different purposes, but no matter the goal, a DST will help you optimize the benefits of a 1031 exchange or a trade of a business interest. Here are the advantages of DSTs in providing 1031 solutions.

1.   You Can Sell and Buy Without Triggering A Taxable Event

The 1031 exchange is the best strategy for deferring taxes on capital gains. However, if you do not incorporate your 1031 exchange into a Delaware Statutory Trust, you will be leaving money on the table. You sell something for a profit; then you have to pay the government a portion of it, right? Not if you use a DST.

A DST offers a means for investors to buy and sell real estate without triggering a taxable event. Unlike a partnership, DSTs are ‘pass-through’ entities that do not incur taxes at the entity level. Instead, any income or gains are taxed only upon distribution to unit-holders.

The flow-through characteristic makes the DST useful in an exchange since it immediately distributes sales proceeds to the unit-holder. Every dollar allocated can be reinvested into another property under Section 1031 without incurring a tax liability, unlike ordinary partnerships or LLCs taxed as sole proprietorships or corporations.

2.   Allows Small Investors Chance to Own Fractional Shares of Commercial Properties

The Delaware Statutory Trusts are a unique entity that came about because of the growing popularity of Section 1031 of the Internal Revenue Code. One of the unique features DSTs present is allowing smaller investors to take advantage of the benefits otherwise only available to more prominent investors.

Delaware Statutory Trusts (DSTs) offer smaller investors the opportunity to participate in 1031 exchanges like large institutional investors. A key advantage to real estate investing through 1031 like-kind exchanges using Delaware Statutory Trusts, DSTs, is the ability to own fractional shares of property, which is affordable for small investors.

3.   DSTs Provide Professional Management on Behalf of Investors

A Delaware Statutory Trust (DST) is a legal instrument created to manage a property on behalf of investors. A DST holds title to the property, while an investor has an interest in that property. DSTs will professionally manage the property on your behalf through professionals put in place by the project sponsor.

4.   DSTs Shields Investors from Liabilities Beyond Their Share

DSTs shields investors from liabilities by limiting the liability of the investors to the value of assets of their trusts. The limited liability gives investors peace of mind and eliminates some uncertainties. Delaware Statutory Trusts create separate, non-personal entities that mitigate risks, secure the assets and protect investors.

Those who hold title in their name are personally liable for all debts and actions of the entity. However, investing with DSTs, your liability is limited to the amount of your investment. Hence, if your tenant trashes your building or there’s a gas explosion, you can lose your shirt.

5.   Quick Closure

One benefit of Delaware Statutory Trusts (DSTs) is that they provide a quick and clean way to sell your asset and close your transaction fast. DSTs pre-package the whole process since due diligence is already in place. DSTs offer a simple transfer that is not time-consuming, bearing in mind that the transaction does not trigger a taxable event.

Conclusion

The primary advantages of DSTs over other 1031 Solutions are the speed of completing the transaction, deferral of taxes. Delaware Statutory Trusts (DST) are another way to implement a 1031 exchange and can be a very effective way to save capital gains taxes and receive other benefits under the IRS Section 1031 ‘like kind’ exchange rules. Delaware Statutory Trusts (DSTs) are intelligent estate planning tools. DSTs, along with a 1031 exchanges solution, present the only viable option for US property investors interested in selling US real estate property tax-free for a significant profit.