Perhaps you wonder why your colleague is having a better financial position than you if both receive the same paycheck and have similar expenses. In this case, when we found someone with similar questions, we take a look at the credit score to be sure how low it is.
In previous articles, we have talked about how the credit score is measure according to the two ratings that lenders use when a person asks for their services, FICO Score and VantageScore. For FICO, a good credit score starts from 670; meanwhile, for Vantage, it does at 661. Each company has its system to build the rating for every customer, but they follow similar principles.
The key is that your score is under scrutiny every time you need to use credit for something. This way, the approval or denial of it, or if the interest will be higher or lower, depends on a large degree on that number.
These are five advantages of having a good credit score.
- Renting is going to be easier
Landlords and agencies rely on credit score before deciding whether if you qualify for renting their property or not. Being over 700 points in any rating increase chances for your option. Besides, it is more likely to avoid paying more extensive deposits or needing a cosigner when you have that qualification.
- Better deals on your credit cards.
The opportunity to get the best credit cards with low interest rates, rewards and enjoy juicy cashback programs increase exponentially. Better financial instruments mean more savings to you. The less you pay on interest, is more money in your pocket. The same goes for rewards and cashback programs.
- Refinancing becomes a suitable option
When playing the financial game, you need all the help you can get. Not everyone is aware of how beneficial it could be to refinance a mortgage or a student loan at the right time. Remember, refinancing is getting a new loan to pay the old one. The trick lies in signing a better deal with conditions more favorable. That way, you will have more control of your budget. This possibility is a solid path to follow when you have a high score.
- More competitive car insurance rates
The principle is the same. The higher your credit score, the less risk you represent to an insurance company. Along with your high rating, they see someone reliable and predictable and a low probability of being dealing with a potential loss for them. Therefore, offering deals “impossible to refuse” become a rule.
- Get better deals on cell phones
A good credit score opens doors to fabulous gadget deals. Forget about choosing pay-as-you-go plans or mid-range phones because the flagships require out-of-reach security deposits.
These five elements are just the type of the iceberg. Consider your credit score as your reputation in businesses. You need to build one of liability and responsibility to get access financial brighter future.
With better scores comes an excellent negotiation power for almost every purchase you think to make now or in the future. In fact, you could say those dreamy big-ticket items start seeing closer.