One of the most well-known types of credit scores are FICO scores, created by the Fair Isaac Corporation. Personal FICO scores range from 300 to 850. Generally speaking, a FICO score above 670 is considered a good credit score and a score above 800 is considered excellent.
1. Increase your chances of being approved for a loan or credit card
To borrow money of any kind, lenders need to know that you can pay it back. That’s where a good credit score comes into play. At the point when moneylenders, banks, Mastercard organizations, and even vehicle sellers settle on a conclusion about endorsing any kind of credit or credit (contracts, vehicles, Mastercards, and that’s just the beginning), they will assume your praise score.
2. It gives you better conditions and lower interest rates on loans and credit cards
Let’s say you have a FICO score of 700 and you want to buy a house. That puts you in a great position to make an offer because a good credit score will lower your interest rate and down payment in most cases.
But on the other hand, if you have a credit score of 400, you will have to make a much higher down payment and pay more in interest.
Your credit score definitely has a significant impact on how much money you have on a daily basis, or in other words, your cost of living.
As a business owner, your credit score will determine everything regarding your potential business loan. Not only if you are approved or not, but also the amount of the loan, the interest rates and other factors.
Keep reading this article if you are wondering what exactly is the relationship between credit score and interest on a business loan, and what rate you can get with your credit score.
3. You can make better deals with your suppliers
Take, for example, the fact that you can negotiate better deals with your suppliers.
It’s always beneficial to show your credit history, which reflects how much and how quickly you’ve paid off your loans and debts in the past. You can even get better terms when you negotiate your cable and Internet rates.
By showing a good credit score, you can avoid late fees or even reduce or eliminate security deposits.
4. You can get better car insurance premiums
A good credit score also helps you when negotiating your car insurance premium.
Insurance companies use numerical scores to predict how likely you are to have an accident or make a claim. And these scores are calculated from the information in your credit report. Auto insurers also use your scores to determine how much you’ll pay for auto insurance.
To calculate their own insurance scores, they’ll look at the length of your credit history, number of accounts in good standing, payment history, credit utilization rate, collection accounts, and recent applications for credit.
5. You will have more possibilities to rent where you want
Although this is not always the case, landlords sometimes use the credit scores of their potential tenants to evaluate the rent.
A bad credit score, especially if it’s caused by a previous eviction or an outstanding rent balance, can significantly reduce your chances of renting the apartment or house you want.
6. You will not need a security deposit on your cell phone contract
Some cell phone service providers may not give you a contract if you have bad credit, forcing you to choose a pay-as-you-go plan that can be more expensive, especially if you own a business and are always on the go. telephone.
Those with good credit scores do not have to pay a security deposit and can get good discounts on the latest mobile models.
7. You will not need a security deposit on utilities
Some electric companies and water providers require you to pay an initial deposit of up to $200. It’s a huge inconvenience if you’re moving. Even if you’re not moving to your home or business location, you may want to change your utility plan for other reasons.
A good credit score means you simply won’t have to pay a security deposit.
8. It is your cover letter when looking for a job
Although not always the case, employers sometimes check credit scores to get a better idea of their potential employees. It can help them determine if there’s a chance you’re committing theft or fraud, find any evidence of mishandling your finances, or judge your liability in general terms.
We all know that a good credit score doesn’t really say much about an individual’s character or personality, but it can offer employers some insight into your payment history.
Don’t worry: they don’t access your credit score, they see a modified version of your credit report. The report that employers can access will only show your payment records, the amount you owe, and your available credit.
9. You will save money overall
Ultimately, the difference between a good credit score and a great one can save you thousands of dollars in the long run. Check your personal credit report regularly and pinpoint the areas that are hurting it, so you can find the best ways to improve it.
