Credit bureaus determine your credit score based on your payment history, number of open accounts, and other factors. The FICO Model ranges from 300-850. The average score is 714, which is considered “good.”
Excellent credit is anything above 800. Reaching this level takes work, but the impact it can have on your life makes it worth the effort.
Read on to learn 3 benefits of having good credit.
No insurance company can turn you down based on your credit score, but they can use it to determine your premiums. The better your score, the lower it will be.
Insurance companies often assume that a poor score means more claims. It makes you seem like a riskier lender, leading to high premiums.
- Buying and Renting
Excellent credit will help you in almost every aspect of buying or renting a home. One of the most important is when you send in a rental or mortgage application. It’s more likely to be approved because your high score makes you seem like a more trustworthy candidate.
Your credit score also has a major impact on the interest rate of your mortgage. You’ll enjoy significant savings even if you only improve your credit score by a few percentage points.
Most rental properties require a security deposit equal to 1 month’s rent to protect the landlord from damages. Excellent credit decreases the amount, and you may even be able to forgo it altogether.
This is one of the most underrated and lesser-known benefits of a higher score. Companies may check your credit report before hiring you. They have to ask your permission first, but it can be the difference between getting hired or not.
This makes it important to keep your credit score high and make sure you have one. 22% of Americans don’t, either because they don’t have an account open with one of the major credit bureaus for at least 6 months.
- Credit Cards and Loans
A high credit score gets you higher credit limits that let you buy more with your card. Lower interest rates and monthly payments make it easier to pay off loans or cards and helps you improve your credit score even more.
A high credit score also helps you get the terms you want. You can ask for cards with better rewards such as cash back, gift cards, and travel credit.
Hiring a professional is one of the best ways to improve your credit score and get all the benefits that doing so provides. Look at the average credit agent pricing to see how it can fit into your budget.
More Benefits of Having Good Credit
Your credit score is a combination of almost every buying decision you’ve ever made. It’s based primarily on how often you’ve borrowed money and repaid it on time.
The benefits of having good credit extend to almost any area of your life where money’s involved. This includes getting insurance, buying or renting a home, applying for a loan or credit card, and even getting a job. The higher your score, the easier these tasks become.
Read the rest of our content to learn how to use and improve your credit score.