A credit score is a number ranging between 300 and 850, although anything above 700 is considered very good. This number changes every month and is linked to the way you manage your debt, credit and other financial decisions. Since it’s regarded as a proxy for your financial abilities, it has a significant impact on your credit eligibility, interest rates,and other advantages.
There are a lot of things that can affect this number and you must learn how to control each of them to reap the benefits. The most critical aspect is paying your debts on time. If you asked yourself do students loans affect credit scores or are old obligations so significant, the short answer is yes.
Here is a list of top perks you can enjoy if you are on top of your financial game.
1. Negotiate Your Interest Rates
Most credit companies use an algorithm to determine your interest rate for a new home or car. These large loans even require a minimum credit score to be considered. Yet, if you already in the jet set of FICO, you can leverage this by directly negotiating your interest rate. A high score means less risk for the lender, it’s almost a sure investment. You can use these perks even for smaller debts, like a personal credit.
2. Get The Best Insurance Premiums
The risk is supposed to be transmitted from one manifestation to another. So, for example, if you are an avid gambler, there is little chance of you being responsible for other aspects of your life. That is why insurance companies look at your credit score as a way to predict how good of an investment you would be. There is a psychological explanation here. People who get in debt and can’t get out tend to engage in riskier behaviors like drinking, speeding and other ways of losing control.
Although the insurer doesn’t look at all the factors included in the score, they are interested most in your payment history and outstanding debts.
3. Get Smaller Deposits For Rent
Being considered trustworthy pays off not only when you want to get a loan, but also when you rent. Since your landlord has some solid evidence that you know how to handle payments and keep up with the payment schedule, they might be more permissive when it comes to the security deposit.
You are also deemed less likely to destroy the property, leave without paying your bills or getting evicted. Good paying citizens usually don’t get into that kind of trouble by default.
4. Increased Flexibility For Your Payments
A good credit score is your business card in the relationship with lenders. Apart from the negotiating power regarding the interest rate you get some flexibility regarding payment terms too. If the credit institution is sure that they will get their money back from you, they might be interested in allowing you to do this a bit on your own terms.
You can even try this for smaller items like a new phone or a TV. Getting the money after all is more important than getting them fast.
5. Various Bonuses
An excellent paying customer is someone you want to keep on your team. That’s why credit card companies are ready to give some perks to those who follow their end of the deal.
Depending on your interests and the card you have, you could get airplane miles, discounts in shopping centers or even at Disneyland. Other banks have some cashback programs or different ways of rewarding good clients.
6. Employment Perks
Not all employers care about your score, in some states it is even illegal to bring this subject into discussion. However, if you are thinking about landing a top job, especially in finance or management, it makes sense for your future boss to care about your ability to manage at least your budget before trusting you with more significant amounts.
Most HR departments at least screen candidates, even if they don’t make it visible or use this in the final decision.
7. Low-stress Levels
This aspect is of the utmost importance. Money is the primary source of stress, divorce and feeling overwhelmed. If you are in control of your finances, you will have more time to pursue a career, your passions or enjoy family life.
Don’t underestimate the power of having a excellent credit score. This tool helps you have the necessary confidence in negotiation, an interview or when you apply for a credit card. Be bold and let your lenders know you are a good business partner.
