The members of the credit elite — consumers who reside at the top of the scoring ladder — are no strangers to the hard work having good credit requires. Maintaining good or excellent credit can help you qualify for the best financial offers. Here are four ways this can pay off and might leave you feeling financially empowered.
1. Credit Card Perks & Rewards
When you have good credit scores, you open up the doors to new credit opportunities. For example, you may now be eligible for some of the more premiere credit cards on the market that offer great rewards. (You can read more about reward credit cards here.) Before you apply for a new card, it’s a good idea to verify where your credit currently stands. You can see two of your credit scores for free, updated every 14 days, on Credit.com.
2. Negotiation Power
As an attractive borrower, you can expect to wield greater negotiation power in your financial dealings. For example, an Experian analysis found that “85% of the rental applicant population is in one of the three lowest VantageScore credit ranges (501 to 799), compared with a national average of only 64%.” You may be able to use your excellent credit score to distinguish yourself from the competition and negotiate better terms and conditions in several situations.
3. Lower Insurance Premiums
Insurance is the business of risk, and the premium you pay is based on several factors, including age, city of residence and past behavior. Based on the latter, it’s no surprise that many providers look at your credit to set insurance rates (California, Hawaii and Massachusetts have laws prohibiting this practice). Consumers with excellent credit may been seen as a lower risk and may be rewarded with lower auto, homeowner or health insurance rates.
4. Prime Interest Rates
Borrowing money can be easier with high credit scores. A stellar ranking may qualify you for some of the best available mortgage rates, auto loans and revolving APR. Depending on the value and length of the loan, excellent credit could help save you thousands of dollars over time.