Credit is a concept that was prominent in pre-modern Europe. Shopkeepers would allow regular buyers to run up tabs for the basics such as bread and candles. But, the system also worked its way right up through the richest in society.
Skip forward to the 21st century, and having excellent credit is something people aspire to in everyday life. And there’s a good reason why people put effort into obtaining a gold stamp when it comes to their credit score. It’s almost like joining an elite club with loads of perks to take advantage of.
Yet, what are the benefits of having a great credit score? After all, we hear lots about how to get good credit, but little in the way of the perks to it. So let’s now explore the benefits of having excellent credit.
What Is a Good Credit Score?
OK, so instead of jumping straight in with the benefits, let’s first determine what a good credit score is. And we’ll focus more on credit range here than a particular perfect score to attain.
There are many credit scoring bureaus out there. So we have to consider which credit scores are worth looking at. And the general consensus is that there are a top three to keep your eye on TransUnion, Experian, and Equifax.
Let’s just say that if you have a decent credit range with these bureaus, you’re on the right path. We should also mention FICO, which is a valuable indicator too. But in any case, the range for a good score is different for the different bureaus.
For example, one bureau may have your credit score as poor, if you score under 600 points. While another bureau may classify poor as below 580. So this is something to be aware of as you may be able to boast a better score using a particular agency in an application for something.
And bear in mind, you are entitled to get a free credit report from the three major bureaus we mentioned above every year. Thus, we recommend you take advantage of using one of them. Yet, beware that checking your score too often can knock points off your score.
So what’s the answer to what is a good credit score? Well, in general terms, the higher your score, the more trustworthy you are with any credit reporting company. But the only way to know exactly what’s a good score is to look up the credit score ranges for each company.
Good And Execellent Credit Benefits
Now we’ve looked at how you can find out what’s a good credit score, let’s get on with the good credit benefits. We’ll run through nine specifically.
Bear in mind, some of these benefits might not be relevant to you. Also, some of them may seem more valuable to you than others. But in the end, all these benefits can add up in the grand scheme of things.
Better Insurance Rates
Many insurance companies nowadays use a credit check to help them determine what sort of insurance rates you can qualify for. And, this is perfectly legal and acceptable as you can see here.
In fact, they can check your credit score to do things like:
- Raising your insurance premiums
- Denying coverage to you altogether
- Denying you a renewal
Therefore, developing and maintaining a good credit report is super beneficial when applying for all insurance types.
Borrow Money With better Interest Rates
It’s typical that if you have a credit score in the mid 700s or more that you are going to enjoy better interest rates when you borrow money. And one of the most common things people like to buy with lower interest rates is a car through the use of a car loan.
Of course, a lender with measure up other factors when deciding on lending you money to buy a car. One example factor is your debt-to-income ratio. However, a high credit rating and decent disposable income will serve you well if you want an attractive car loan.
Also Read: How Does Credit Card Interest Work: Your Definitive Guide
Credit Card Providers Will Give You Better Options
Excellent credit means access to high-level and attractive credit card options. When you think, you earned your good credit and show you can be trusted, then it’s a no-brainer for companies to give you better deals.
You’ll likely be able to access better rewards, cash back, and lower interest rates with a killer credit score. With a low-interest credit card, it’s viable to even consider using it for business opportunities. Or, it would be a perfect option for emergencies.
If you’re under thirty, we’d like to show you these credit cards which are the best for 2022 in your demographic. Some of these cards offer some great new features you may not have seen until now.
How Does https://nationalviews.com/credit-card-interest-working-guideCredit Card Interest Work: Your Definitive Guide
Get Great Terms On Smartphones
With the rapid advancement of smartphone technology, it’s hard to keep up with cell phone updates. It can also be super expensive to get the latest up-to-date smartphone every other year or so.
However, if you have an excellent credit report, then you may be able to get phone financing with very little interest added on. Plus, in many cases, you may be able to find 0% interest financing plans, if your credit score is stellar.
So you can see that you can spread out the cost of your phone over a one or two-year period. Then you can enjoy it for a little longer before you choose a potential upgrade.
Enjoy More Rental Options
It’s pretty obvious that landlords will want to check what you’re like at making payments over a course of time. A common way to do this is to check your credit report as an indicator of whether you’re going to pay rent on time or not.
Not all landlords do credit checks. But, if you are wanting to rent what looks to be your dream accommodation, be sure that others will want it too. A high credit score might give you just enough competitive edge over several other potential renters, whereby the landlord offers you the rental contract.
Gain Approval for Higher Credit Limits
If you want to make bigger purchases and prove that you can manage your money well, then you ought to try and apply for higher credit limits. You could do this with the cards you already have. Or, you could approach new creditors to see what they can do for you.
Plus, one great thing about getting higher credit limits is that you can improve your credit utilization ratio. Although, if you want to make the most of an improved ratio, it’s important to get the new higher limit, but not spend much more than you usually do.
No Need for Utility Deposits
All the benefits add up! Not having to pay a deposit to a utility company when you move into a new place is one of the smaller benefits that contribute to the bigger picture. And this is what you’ll benefit from if you have a decent credit score.
The reason is that utility companies, like landlords, want to have reasonable assurances that you will pay, and pay on time. A quick look at your credit report can help them decide if they need a deposit from you or not. If your credit is bad, they may even require a guarantor to pay if you fail to.
We should also say though that the process of getting utilities may be a lot easier for you too. For instance, getting new internet installed will be a much smoother process for you if you have a history of making payments on time.
Better Chance of Employment in Some States
Not every state allows employers to request your credit history. However, having a good credit score in the states where employers can ask to check it out could help you a lot in landing a dream job.
You see, you could have a competitive edge over countless others applying for the same job if you have a respectable credit score. When you show a potential employer your high score, what it shows them is you are competent and reliable.
Key Ways To Maintain a High Credit Score
Now, to finish up, we’d like to mention a couple of key ways you can maintain your credit score. This is so you can keep reaping the benefits.
First off, making payments on time is a no-brainer. This is what credit bureaus want to see to give you the points. Plus, this is what many other parties want to see when you are applying for their services.
Then, you want to ensure your credit utilization ratio is kept low. The lower the better really. One of the easiest ways to lower your ratio is to raise your credit limits. You can do this by asking existing creditors, or applying for new credit elsewhere.
The Benefits of Excellent Credit
It should be pretty clear to you now that there are various benefits you can enjoy if you have excellent credit. Think long term, stay consistent, and then research what’s on offer given your fantastic position in the credit world.
So thanks for checking out this post. If you did find it useful, please also consider browsing our blog for more informative reads.
