Smart Reasons to Save, Use and Invest Money

The Benefits of a High Credit Score

 

Ever since I was young, I was taught the benefits of establishing a high credit score.

My parents taught me to purchase things on the credit card since the first day that I got my first credit card, but they also pounded into my brain that I should pay it off every month.  Since I didn’t carry a balance, it probably took a longer time to build up my credit rating, but since I didn’t need it for any big purchases at age 18, it didn’t affect me.  That said, today my rating it’s over 800, so even by paying off my balance each month, I was still able to move my credit score up!

Credit Score Benefits

If you have a high credit score, you have some leverage to get better deals… if you know how to use it.

  • This is one time where it is good to brag!  Tout your high credit score by asking for a better interest rate on loans for cars and mortgages.  The bank know that you are valuable since you are unlikely to default on the loan, and the bank wants your business because of this fact.
  • You can get special discounts on financial products such as the various types of insurance.  Apparently being a safe, responsible driver and having a high credit score are highly correlated.
  • You will receive the premium credit card offers in the mail.  I typically get the premium credit card offers, including a black card in the mail.  I’m sure this is because of my high credit score because my salary sure doesn’t warrant it!!!
  • Prospective employers can check your credit score rating before hiring you.  While this may not be done much in practice, it’s an option that an employer has.

Okay, now that we know that there are obvious benefits, the trick in receiving those benefits is to ask for them!  For instance, if you’re looking to buy a car and need a loan, the company loaning you the money isn’t going to say “hey, based on your credit score we’re going to shave an additional quarter of a percent off of our current rate”!  You’ll  have to know what you are worth before you go in to get the loan!

If you have a high credit score rate, congratulations!  Just make sure you use your credit score power wisely!

MR

16 Responses to The Benefits of a High Credit Score

  1. It can be somewhat scary knowing that employers will be checking out the credit score. I suspect that this will be getting even more common so a good piece of advice to younger individuals is to use debt wisely.

  2. I think employers have been checking credit scores a long time. I don’t know what mine was coming out of college, but it couldn’t have been very good as I had missed a couple payments here and there. Still got a job though…

    I have one thing one my report I need to get taken off. It goes back to a loan from 10 years ago. Just one of those things I still have to take care of and I just don’t seem to have the time, or I forget. Thanks for the reminder.

    • You’re quite welcome! :)

      It’s funny, I forgot about the employer checking credit score aspect until just recently. Writing this post actually jogged my memory…

      I guess if I were an employer, I would want to know if a potential employee has a decent score or not too.

  3. I’ve noticed I’m getting many more credit card offers in the mail since my score has improved. I’m still in the low 700′s (depending on which credit score I use), but over the next 5 years or so it should keep increasing. ;)

    • It seems like I get more credit card offers in the mail than anything else. And I usually get a piece or 2 of mail everyday.

      I guess it could be viewed that having good credit is bad for the environment from the aspect of all the wasted paper in credit card offers that arrive in the mail… :(

  4. Congratulations! I know exactly what a high credit score gets you!

    When I was shopping for a mortgage lender, I got a pretty good rate from one and told another about the rate. He actually laughed saying no way I’ll get that rate (he didn’t know my actual credit score)!

    Ended up closing on that rate with the original vendor!

  5. My employer definitely checked out our credit scores. Of course, we have foreign people working at our company with little to no credit history, and I know other Americans working here who have mentioned how much they “messed up” their credit in college, so I don’t think it’ll stop you from getting hired. It would be interesting to know what they look it up for, if they hire people with poor credit anyway? :)

  6. Hi Money Reasons. Thanks for the tips on taking advantage of having good credit. :) Have you ever looked at http://www.creditkarma.com? It’s a great tool to identify what variables are factored into your score and lets you know what areas you need to work on or fix. It actually gives you a credit score, but IMO, it’s only an estimate and should be taken lightly. For a free tool, it’s a great site.