4 Unexpected Ways It Pays To Have A High Credit Score

Like it or not, those three-digit credit scores have a lot of sway over our lives, affecting everything from our ability to qualify for loans to our romantic prospects. (In a recent survey, 69% of respondents said a good credit score is a very or extremely important quality in a potential mate — outranking humor and attractiveness.)

So it’s easy to understand why more people are striving for a perfect score these days. Through compulsive monitoring and management, an estimated 3 million Americans now have a perfect FICO score of 850, and more than 41 million have at least an 800.

Perfection isn’t really necessary, though — except for bragging rights. “You can be 90 to 130 points off a perfect score and [still] get the best deals lenders have to offer,” says credit pro John Ulzheimer, formerly of FICO and Equifax.

Getting your credit score into that “excellent” range of 720 or more is definitely worth the effort. And not just because you’ll get better deals on car loans, cards, and mortgages.

1. You may edge out the competition for work.

Imagine you applied to your dream job, and the hiring manager narrowed down the competition to you and one other candidate. You’ve got similar skills, education, and experience. Who’ll get the job? Probably the one with the cleaner credit report.

Some 47 percent of employers check credit reports of job applicants as a part of the hiring process and use that information to help make their decision. “It’s all about your personal responsibility and how that will bleed over into the office,” says Ulzheimer. “Would you want to hire a tax accountant who has a tax lien on their personal credit report?”

2. You’ll score better rates on loans.

The lower your credit score, the more expensive it is to borrow money. “If you have crummy credit, you can still find places that will loan you money. You just might not be very happy with the terms they offer,” says credit expert and CreditCards.com analyst Matt Schulz. “Great credit means more doors are open.”

Say you’re applying for a 30-year fixed mortgage for $200,000. According to myFICO.com, if your credit score is 620-639, you qualify for an interest rate of 5.044 percent, which translates to a monthly payment of $1,079 and $188,450 in interest paid over the life of the loan. Up your score to 680-699, and your rate drops to 3.854 percent, your monthly payment to $938 and your total interest paid to $137,706.

But increase your score to 760 or better, and you could score a rate of 3.455% and a monthly payment of $893. And your total interest paid is (a comparatively cheap) $121,506. That’s a savings of $67,000 just for having a high credit score!

3. You’ll have access to valuable credit card benefits.

A healthy credit score can help you qualify for higher credit limits on existing credit card accounts — which can improve your debt-utilization ratio, a key metric that measures how much debt you have compared to available credit — as well as give you access to new cards with lower interest rates and/or premium perks. That could include valuable rewards programs, cash back offers and travel benefits (like automatic upgrades or emergency insurance).

What perks do the credit experts like best? Zero-percent introductory rates and balance-transfer deals, which are particularly helpful if you’re trying to pay off debt faster. “There’s really nothing better than ‘free money,’ or a period where your credit card debt is interest-free,” says Ulzheimer. Just remember to read the fine print, and make a plan to pay off your balance before the promotional period expires.

4. You can save money on waived security deposits.

One more reason to boost your score? Having a high credit score can save you money in the form of waived security deposits on apartments and vacation rentals, car rentals, utility setups and even cell phone contracts.

“Someone with a higher score is more likely to pay their obligations on time,” says Ulzheimer. “That’s why tenant screening, property management, and utility companies will give you a break on security deposits when you open accounts or apply for housing. They’re more likely to get paid, so there’s less of a need for deposits.”

Read the original article on Grow. Copyright 2017. Follow Grow on Twitter.

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  • Williams Corey

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  • Linda Price

    Interesting… paid off my car loan, so the finance company “closed” the account, now my credit score dropped.

  • Margaret Campbell

    It’s kind of messed up to me that employers check credit scores. Besides being an invasion of privacy IMO (they don’t need to do it, they’re paying you for work which you’ve demonstrated your ability to do through your resume and references they’re not giving you a loan or mortgage), a low credit score doesn’t necessarily demonstrate irresponsibility. Like–and I think its a US thing to check it which is even more messed up–but say you have a bad credit score because you had crazy medical bills from and accident and you didn’t have health care and you were a minimum wage worker and it mucked your credit. Also I had a pretty sh*t score in the year after I graduated from grad school. I couldn’t get a bank loan to supplement my government loans because I had nobody to co-sign on them and so I really maxed out my credit cards and didn’t pay my minimum payment once or twice and let my phone bill build up for a few months which all took a while to pay off with the income I had relative to keeping a roof over my head and food in my cupboards while I was looking for a job in my field. In the year it took me to get a job in my field. during that time I had a mid-600s score. Within a year of getting a job in my field that paid well my credit is back in the mid-800s. But imagine I had been turned down from that job for being “financially irresponsible”

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