A high credit score has become the Holy Grail for modern consumers who want to take advantage of low-interest credit cards and loans. Those with an excellent credit score often have other advantages that help them save money as well.
What is an Excellent Credit Score?
More than one organization produces credit scores for individuals. FICO credit scores are the most popular. As such, this article will focus on how this specific type of score can affect your lifestyle.
FICO credit scores range from 300 to 850. Anything over 720 is considered excellent.
The Advantages of Excellent Credit When Borrowing Money
Some of the most notable advantages of having an excellent credit score over 720 occur when you want to borrow money from a lender.
Today’s consumers borrow money all the time. We borrow money to buy houses, cars, and other property, but we also borrow money when we want a convenient payment option at gas pumps and groceries.
An excellent credit score will usually qualify you for lower interest rates on all types of loans. This is true regardless of whether you take out a home mortgage or apply for a credit card. A high credit score tells lenders that you are a safe bet. You have paid your debts on time in the past, so it is reasonable to expect that you will continue to do so. Banks, credit unions, personal lenders, and credit card companies, therefore, want your business because they believe that you will pay them on time.
Those with bad credit might not even qualify for high-interest loans and credit cards, but you get to take advantage of the lowest rates because companies can trust you to pay them.
The Advantages of Excellent Credit When Buying Services and Products
The advantages of an excellent credit score over 720 don’t stop at low-interest loans and credit cards. If you have always had excellent credit, then you might not even know how many headaches you avoid and dollars you will save when you buy services and products.
Auto insurance companies, for instance, usually offer lower rates to individuals with excellent credit. They surmise that people who are financially responsible are probably responsible in other areas of their lives as well. Therefore, they offer good-credit discounts to attract premium customers.
Many utility companies also give better deals to people with excellent credit. If you have excellent credit, then you can often avoid deposits that utility companies commonly charge their customers. Your excellent credit score tells the company that you are able to pay your other bills on time, so they trust that you will pay them too.
Saving money on deposits can also apply to other products and services. Car rentals, hotel rooms, and utility services are just a few of the areas where you will save money when you have an excellent credit score.
Earning an Excellent Credit Score of 720 and Higher
If you have poor or average credit, then you will want to boost your rating to take advantage of these benefits. Paying your bills on time and decreasing your reliance on credit can have a significant impact on your credit score.
Once you have earned a credit score of 720 or higher, you might find that the money you save makes it even easier for you to maintain an excellent score.