Benefits of Good Credit Score
Do you have positive financial habits? Are you notorious for paying your bills as soon as possible and well, not procrastinating your financials? If that sounds like you, chances are you have a good credit score.
A good credit score means that you have a good financial background and credit history. In general, this means, you pay your bills on time, you do not carry high amounts of debt, and you have reliable spending habits. When you charge something on a credit card, you always pay it back, consistently and in timely manner.
Here is how Credit Karma defines credit scores:
“… A credit score is a three digit number calculated from your data-rich credit report and is one factor used by lenders to determine your creditworthiness for a mortgage, loan or credit card. Your score can affect whether or not you are approved as well as what interest rate you are charged”
“A good credit score is generally considered to be 720 or higher. Lenders, however, can each have different standards for what they consider to be a good credit score, so it‘s important to keep building your score to receive the most favorable interest rates and highest rates of credit approval.”
In simple terms, if you go to make a large purchase, such as renting a house or a car, a lender may be less likely to work with you if you have a poor credit score. This low score may lead them to believe you will not pay them on time or even at all.
According to credit.com, below is a list of numbers that provide a range of credit scores and their rankings. These numbers can vary among lenders but here are the basics to give you an overarching idea of good versus poor credit scores:
760 – 850: Excellent
720 – 760: Very good
680 – 720: Average – very good
620 – 680: Fair – poor
Below 620: Poor
Along with earning a good credit score, which is key to financial success, comes benefits.
Today I would like to share with you a few benefits of good credit score from a few popular sources.
Benefits of good credit score may vary from person to person and lender to lender, but pay attention because some of these benefits may currently apply to you now, if not the near future.
Benefits of good credit score, according to USNews-Money:
- Increased credit card limits
- Easy vacation and home rental reservations
- Better negotiating power for loans, lower interest rates, or higher credit line
- Great credit card deals
Benefits of good credit score, according to Nerd Wallet:
- Improved chances of landing housing
- Better auto insurance rates
- Locked in utility services
- Better potential to land a job
Additional benefits of good credit score, according to Capital One:
- Borrow money
- Obtain a credit card
- Ability to make major purchases
When making purchases and managing finances, remember to also consider the factors that can contribute to building a good credit score, such as (according to Capital One), managing money careful, paying loans and bills on time, staying within credit limit, and borrowing or charging only what you are capable of paying back.
