by Susan Paige
There was a 6% increase in Americans vantage score between 781-850 in 2017.
Having good credit translates to having better opportunities in the future. Good credit can get you leverage and credit for a car loan, insurance, and mortgages among other benefits. Lenders can easily trust your abilities to repay loans with your good standing score.
With a low score, you may not be eligible to access financial assistance especially if the interest to be incurred is quite high. You need to improve on your credit as soon as possible so that it may be easy for you to accomplish your life goals.
Everyone talks about the importance of having a good credit history, but what can good credit get you? Here are the top ten benefits of having good credit.
What’s a Credit Score
Based on your credit history, you get a statistical number that evaluates your credit-worthiness. Lenders will use this score to weight your abilities to repay their debts. The score ranges from 300-850 with the higher the score the more credit-worthy you will be.
If the score is above 700, you’re considered prime and you qualify for a loan. Anything below 650, you may be considered a risk and, in some instances, problematic.
Factors That Determine Your Credit Score
How do credit scores work and what calculations determine your creditworthiness?
- Your payment history shows whether you pay on time or not
- Percentage of credit that is available to you
- The length of your credit history based on the duration that is considered less risky
- The types of credit either installment credit such as mortgages and car loans or revolving credit such as credit cards
- New credit is dependent on the number of new accounts that result in credit inquiries you have opened.
What Can Good Credit Get You
It’s pretty important to work diligently to improve your score. This is because it can get you some really cool perks
1. Access to Best Credit Cards
You have probably seen the many adverts on attractive credit cards and what they can do for you. With the credit cards, you can get perks such as cash back and low rates. To qualify, all that’s required is to have a good rating credit score. You’ll get to pay low interest rates and get other rewards such as free travel and access to higher credit limits.
2. Get Higher Credit Limit
If your credit limit increases, your credit-worthiness also increases with time. This gives lenders confidence in your ability to handle the credit. They may extend higher credit in the future for other amenities.
3. Lower Security Deposits
Your credit score will determine deposits that you pay for any utility service. With a low score, companies that provide you with electricity, water, gas or cable may charge you more for a deposit if they can’t trust your credit score. You may also pay more for a lease as collateral with at least two- or three-months deposit.
With a good score, you may lower security deposits.
4. Insurance Rates
With a good credit score, insurance for your home or car may be reduced. insurance companies use an insurance score to determine your likelihood to make a claim. This is a slightly different score form what lenders and banks use. Though the same credit report is used to reflect the score the insurance companies use.
5. More Negotiating Power
You can negotiate with your lenders to give you longer repayment periods for loans. You also have a higher chance of getting approval for their financial products. The score gives you the power to ask for a discount or lower rate on your home loan. You may also ask for a waiver on certain fees.
6. Improves Chances of Getting a Job
Potential employers can have access to a version of your credit report that determines your levels of responsibility on repayment. If there are reflags such as bankruptcy and late repayments, some employers may be reluctant to offer you the job.
7. Access to Phone Deals
With good credit, you can purchase your phone and get favorable deals without having to pay large down payments. You can buy the latest iPhone by enrolling in the monthly repayment option for up to 12 months. This is only open for people with good credit scores.
8. Per-To-Peer Loan
Although relatively new, interest on your loan is calculated based on your credit-worthiness or rather score. With a good score, the interest charged is lower.
9. Get an Apartment Easily
Your financial trustworthiness will enable your potential landlord to rent you that nice apartment you want. If your score is low, your landlord may find it difficult to rent it out to you or if they do, they may charge you higher security deposits as they can’t trust you.
10. You Can Opt for Low Risk-Based Lenders
Depending on your credit rating, opening new accounts will be much easier. New lenders may award you better interest rates and on personal loans, you may get lower interest rates.
How Can You Improve on the Credit Score?
To improve on the credit score, you can cosign a loan or credit card with your family or friend. Share the repayment responsibility and the credit report will appear on your credit history. The regular payments will improve your score.
Just ensure you pick an honest and reliable person as late payments will also be reflected in the report and may damage your score.
Ensure you also check your credit report. This will help you know what your aim should be on a monthly basis to improve the report. Also, you can catch an error or two as nothing is flawless.
Improve Your Credit Utilization
Credit utilization is important. Keep your ratios and use the credit minimally. If you don’t need the product, don’t purchase it on credit, you may end up maxing out your credit card which will lower your score eventually.
Now you know what can good credit get you as maximum benefits. In a future job search, apartment hunting and paying utilities and loans become seamless with a good score.
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