A craftsman is a skilled and adept trade worker who has a variety of tools to help him achieve what he wants to create in his daily work. They may spend years developing and perfecting their craft and become highly specialized in their knowledge and abilities. A craftsman is not a craftsman without his tools. They define who he is. Just like a craftsman uses his tools to create magnificent works of furniture our credit score is a tool that can help us produce many financial benefits. Establishing a good credit score will help you save money and give your financial life ease. If you are looking into reasons to maintain a good credit score here are some of the benefits.
A Good Credit Score helps Low-Interest Rates
Interest rates are one of the cost you pay for borrowing money and, often, the interest rate you get is instantly tied to your credit score. If you have a good credit score you will definitely qualify for the best interest rates. You will also be paying lower finance charges on your credit card balances and loans. Less money you pay in interest, the faster you'll pay off debt and the more money you will have for other expenses.
Get a Higher Credit Limit
Creditors will be more comfortable lending you more money because of your proven trustworthiness by your credit score. On the other hand, if you have a poor credit score, your credit limits will typically be low with high-interest rates. You may still get approval for some loans with a bad credit score but it will be limited. Always remember your borrowing capacity is based on your income and your credit score.
Apply with Confidence
You have a better chance for a credit card and loan approval. Although having an excellent credit score doesn't guarantee approval because there are still other factors that lenders take into consideration but having a good credit score increases your chances of being approved for a new credit card.
Having More Negotiating Power
We all like to be in control of a situation so why not take control of your own financial decisions. Think lower APRs, longer repayment periods on loans and better chances for approval. A good credit score helps you to have a better chance to bargain and take advantage of other attractive offers. But having a low 'bad' credit score will cause creditors not to have an option for negotiations and are unlikely to budge on loan terms.
Did you know have a good credit score helps for an easier approval for rental houses and apartments?
Yes, having a good credit score can help you get approval for a rental house or apartment. Many landlords are using credit scores to screen tenants. If you have a bad credit score especially if its caused by a previous eviction or you didn't pay your rental bill and owe money this can severely hurt your chances of getting into a new apartment. A good credit score helps you get into your new apartment with ease and carefree.
Car Insurance Rates
Many insurance companies use your credit score as a portion to determine how much you will pay in premiums. They also claim that people with a bad credit score tend to file more claims and are penalized with a higher insurance rate. Again, having a good credit score, you will pay less for insurance compared to someone with a 'bad' credit score.
Receive a Cellphone with No Security deposit
People with good credit avoid paying a security deposit and may receive a discounted purchase price on the latest phones by signing a contract, however, if you have a 'bad' credit score cell phone providers may not give you a contract. Rather, you might get a pay as you go plan that has a higher price point.
Avoid Security Deposits on Utilities
A good credit score means you won't have to pay a security deposit when you install utility service in your name or to change service to a different area. These deposits are sometimes $100 to $200 and could be a huge bother when you're relocating whether your moving or not an unforeseen circumstance could occur. Better to be safe than sorry.
Of course, the ultimate goal of having a good credit score is to have some bragging rights. A good credit score is something to feel a sense of pride about especially if you have to work hard to take your credit score from bad to good. For those who never had to deal with a bad credit score hold onto doing what it takes to sustain your good credit score.
Since we have been discussing what the benefits are of having good credit score but you might wonder "What is the actual number of a good credit score?" Every lender is going to classify your score differently, but for the range of 300-850, a good credit score is anything between 670 and 739.
But still, if you’re striving for more you might even wonder " What’s the difference between a good and excellent credit score?"
An excellent credit score spans anywhere from 740 to 850 and can give users access to top-tier products with the most competitive interest rates and highest credit limits — better reward programs are also included.
People with excellent credit scores are generally seen as the ideal borrower because they’ve proven over a long period of time with many different accounts that they can pay back their debt on time and in full. As your credit score gets higher, it becomes harder to make improvements to it, so the best thing you can do is keep on maintaining your healthy score.