What Can I Do With A Good Credit Score?
When you have a good credit score, it can be easy to access financial products and get certain privileges. A credit score is a number ranging from 300-850, which suggests to the credit companies the level of your creditworthiness. This usually ranges from 300 to 850 and the higher your score indicates that you’re less likely to default on your payments. A credit score that ranges above 700 is usually accepted as a good credit rating score.
Okay, so let’s assume that you have good credit; what does that gain you exactly?
Here are some of the main benefits:
Obtain a New Credit Line Good credit helps a lot when you are applying for any type of credit for the first time or sometimes even in the future, whether it is a credit card, a car loan, a home loan, a personal loan, or even any other form of credit that you wish to take, being that you have a good credit history and you have a good credit score, the lenders will know that you are creditworthy and they are likely to approve your credit. This puts them in a better position to approve your applications on good terms. Some of the lenders are very specific with the credit score that you should possess to be approved for the loan. When you have good credit standing, you get the added benefits of qualifying for better loan products.
Receive Better Interest Rates The better your credit standing especially as reflected in your credit score, the better the interest rate that any lender will extend to you for any credit. In its most basic sense, a good credit score simply means that you get lower interest rates which cost you less money in the long run. The difference between a poor rate and an excellent rate can amount to a few thousand dollars in total interest saved when it comes to large long-term loans such as mortgages. Just the car loans, for instance, securing the lowest rate of charge is all the difference between a handsome discount or a costly error.
Lower Security Deposits Telephone companies, electricity, water, and even landlords will always ask for a security deposit in case when a person has low or no credit at all. They consider you a higher risk for non-payment of your bills and need it to be available for use in case of payment delays. Though, if your credit rating shows that you pay your bills in time you may not be required to pay such deposits at all. Refusal to pay prohibitive security deposits is an advantage that entails maintaining a good credit status.
Increase Your Buying Power Your buying power is defined as how much house, car, or any other big-ticket item you can afford to purchase. The total credit that lenders are willing to allow you the moment you have a high credit score will be high. This opens the options to a wider price bracket and one can afford a more expensive home, a better car, and so on if one so desires. Good credit means a better ability to buy large items and more general improvements in the execution of major deals.
Meet Exclusive Credit Card Privileges A high number of attractive reward cards such as airline mileage cards or hotel point cards are issued to applicants with very good credit. Some of the more popular cards such as the Chase Sapphire Preferred and the American Express Platinum cannot be gotten with a poor score. If your purpose is to obtain free travel by signing up for a credit card rewards program, you’ll need to have good credit to be able to get the best cards.
Rent an Apartment Easier Credit report and scores may be reviewed by landlords before renting out a property to an applicant. This means that if you did not have a good score or sometimes bad marks on the credit showing that you had missed payments in the past, your chances of being approved are slim. However, good credit provides the landlord assurances that are likely to pay rent on time each month. Good credit eliminates quite a lot of the effort required to have one’s rental application approved and affords additional options.
Through the aforementioned tips, one could secure better rates on insurance. Like any other credit facility, auto and home insurance are cheaper for people with fewer risks or good credit scores. Insurance providers have discovered a relationship between the probability of claims being made and credit information. Therefore, credit information is applied to the policies and premiums in the pricing strategies. Keeping a clean credit record can greatly reduce the expensive fees of insuring a car, home, renters, and the like annually.
Get Hired More Easily Though employers are prohibited from obtaining a credit report of an applicant unless they have the consent of the applicant, it is standard practice for employers to conduct credit checks by reviewing the applicant’s credit score. Creditability provides employers with positive assurance regarding your reliability, promptness, and decisiveness in managing your financial affairs translates to professional management. On the negative extreme, low credit scores signify high risk and possible cost burdens to employers. A high score in a job search is worthwhile and beneficial.
Getting a Cell Phone is as Easy The cell phone companies want customers whom they can always rely on for monthly bill payments. Therefore, many of the leading carriers conduct credit checks to help determine whether to grant contracts or approve installment plans on devices. Those with bad credit scores are expected to make hefty deposit payments or to include co-signers. However, if one has good credit, it is easy to purchase a cell phone from these popular service providers.
Become Your Boss those people who aspire to establish their business, will need good credit to help access capital from financial institutions. Business loans and business lines of credit both make significant use of personal credit rating in the assessment of the creditworthiness of the borrower. Personal credit is particularly useful for an entrepreneur wishing to secure capital for his/her business venture. It also assists in minimizing overhead costs since rates and terms of borrowing are better in those initial, sometimes vital, stages of development.
As we have noted above, being able to manage your credit well means you get to enjoy access to better loan offers coupled with a variety of housing choices to pay less for insurance and deposits. Committing time and effort to maintaining a score, and ensuring that it has not been jeopardized, is not only beneficial financially but has a tangible payoff in the long run. Some of the requirements for this advantage include checking your reports annually, maintaining low balances, and paying all your bills on time so that you can get all these and many more opportunities in the future.
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