This post is sponsored by Lexington Law Firm.
Having a very high credit score isn't necessary for survival, but it sure does make life easier and cheaper. A high score allows you to stretch every dollar you earn, have less financial stress, and can even help you achieve everything on your dream wish list. If your score isn't as high as you want it to be, read about how to build credit, and if your score is already very high, keep up the great work and be sure you're reaping all the benefits.
What is a Very High Credit Score
A credit score of over 800 is considered excellent. I was surprised to discover that the 800 club isn't comprised of just an elite few. In fact, the percentage of consumers with credit scores over 800 is similar to those in the other score brackets. Having excellent credit is not a fantasy. With proper planning and discipline, you can be well on your way to earning a very high credit score, and all of the following perks for doing so.
Easier Loan Approval
Having a high credit score does not mean you are incredibly wealthy. It means you have proven yourself to be extremely responsible with your income. Based on your credit history, lenders can be confident that you will make timely payments and avoid defaulting on a loan.
Since you're not necessarily super rich, you'll probably need a loan for big purchases. So, when it's time to buy that car or house, getting what you need will be far easier.
More Buying Power
Your available credit will keep increasing as account limits rise in response to your high credit score. Buying power simply means the equity you have available to spend.
Higher Credit Limits
As mentioned above, credit card accounts will automatically increase limits over time. I just recently experienced this with my Costco Credit Card. When I initially opened the account, my limit was $3,000. I use it monthly for groceries and gas and have had the account for two years. After about a year, I received a notice that my limit was adjusted to $5,000 and just a few weeks ago got another letter saying it's now $7,500. I never requested an increase, (though you can if necessary,) but thanks to my high credit score and timely payments, my behavior is rewarded.
Lower Interest Rates
Lenders will actually compete for your business. Because you're a safe investment, banks are eager to give you a loan and charge a lower interest rate. Make sure you're shopping around to take advantage of this enormous money-saving perk. Half a percentage point on a mortgage can save you thousands per year!
Easier to Rent an Apartment
Landlords are arguably investing more than a bank when they agree to let you rent their property. They have to trust that you'll not only pay on time each month but also take care of the physical space you're inhabiting. If you trash the place, that can cost them a lot of time and money.
Less Likely to Require Security Deposits
With a high credit score, it's far less likely you'll be asked for a security deposit on phones, utilities, rental cars, and apartments. Again, it's all about risk management for the lender. You've proven yourself accountable, so there is an element of trust established just by this high score.
Credit Card Benefits
Did you know there are credit cards reserved for people with excellent credit scores? These cards have top-notch rewards, lower interest rates, and little-to-no annual fees.
Lower Insurance Rates
Insurance companies look at several factors when assigning you a rate, including your credit score. They found a correlation between low scores and increased insurance claims, so the higher your score, the lower your rate.
More Job Options
Some employers will run your credit as part of the application process. If you are one of many qualified applicants, having a very high score can help set you apart. A friend of mine just got a new job, and they ran a full background and credit check. If you're in the job market, read our post on the big 6 job interview questions.
Knowing you have a high credit score, a good chunk of available credit, and the ability to get a loan easily provides a lot of security. If you ever need it, the credit is there for a low cost. Rainy days seem far less gloomy and there is also a sense of pride attached to a high score–it took discipline and work to earn it, so be proud of your accomplishment!
As long as you remain mindful of your income and don't abuse your credit limits, you've got a good bit of wiggle room to play with these funds. If you plan in advance and have cards with points or travel rewards, it's easy to take that dream vacation with points or get that new TV.
Make sure you're getting the most out of your cards in rewards and low rates. It only takes a phone call to make sure you're getting what you deserve.
If your credit score isn't where you'd like it to be, all is not lost, you just have to start enforcing better habits. You'll be on your way in no time with a little restraint and discipline. Keep an eye on your credit report and be sure to read about these 12 things I didn't know would affect my credit score. It's important to look for errors. If you discover any, call Lexington Law Firm right away or visit them online. They will help you clean up your credit report for a low monthly fee.
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