The Value Of A Good Credit Score

your credit score

courtesy: favim

A good credit score can be invaluable: to help your pocket-book, your reputation and your negotiations. If you take good care of your credit score, it will take good care of you. Credit scores range from 300 to 850. A good score is above 750.

Can You Count The Ways

Let us count the ways a good credit score can save you money.

#1 – Credit Card Interest Rates

Your credit card company takes credit scores very seriously. You are labeled as a high financial risk if you have a low score so they charge you higher interest rates to offset any apparent risk. Whether it’s true or not, they figure that anyone with a low score will over spend, exceed their credit card limits, make their payments late, miss payments and eventually end up in collections. It costs money for credit card companies to chase you down to collect your debt and then write it off if you do not pay. It’s all about dollars and cents. They are not in the charity business; to remain profitable and stay in business they need to make more money then they spend.

#2 – Lower Loan Rates

Lenders are just as serious about credit scores as credit card companies are. A low score can cost them money in the long run so the interest rate you pay on a loan is determined by how financially risky you are. Even though a borrower with a low credit score may still qualify for a mortgage or auto loan, the interest rates on those loans will be higher. To save money by qualifying for the best loan rates, go to the negotiating table with a good credit score.

#3 – Better Insurance Premiums

Credit scores are such a strong financial indicator that even insurance companies are using them to determine home and auto insurance premiums. Again, if an insurance company has to chase down premium payments or process late payments it costs them money. With a good credit score you will qualify for the best insurance rates.

#4 – Employment Reputation

A good credit score will improve your reputation in the workplace. We were not kidding when we said a good credit score is invaluable; in addition to resumes, employers are using credit scores in the interviewing and hiring process. Employers put so much time and money into new employees that they need additional ways to confirm their decision; credit scores is one way confirmation tool many employers are now using.

How Valuable Is Your Credit Score?

Your credit score is valuable enough to check it out before you apply for a job, mortgage or auto loan; buy insurance or use your credit card again. Do you know your credit score?