Here's What You Can Do With A Higher Credit Score
Posted on 23 October, 2022 by Miranda Bottas in Increase Credit Score
Curious About What You Can Actually Do With A Higher Credit Score? Here Are Some Great Examples That Will Help Motivate You.
In the USA and most developed countries on earth, credit - in one form or another - is an important part of modern living. There are so many businesses and industries that revolve around lending, it's hard to imagine how life would be without it. Integrated into nearly every facet of both business and personal finance, credit is a large part of what makes the wheels of global economics go around. It simplifies the purchases of materials and goods for businesses, and makes it possible for individuals to accomplish goals that would otherwise be out of reach. It's how we pull things together throughout our lives, and at times, it's what allows us to splurge on the simple self-indulgences that we don't mind paying interest on.
Achieving and maintaining a good credit score is one of the best financial moves an individual can make. When used responsibly, credit offers us an improved quality of life, access to bigger and better opportunities, and the ability to take control over emergency situations when we find ourselves in a bind. While mastering credit doesn't have to be a difficult task, it does require planning, patience, and responsible decision making. If you handle it correctly you'll expand your credit profile and your score will surely rise. But what could you do with a higher credit score? Let's take a look.
With a Higher Credit Score You Can Earn More Credit
While this one may sound silly, it's rather obvious. The better your score is the more likely lenders will be to extend lines of credit in your direction. Keeping this in mind, it's easy to see how over time you'll easily obtain more credit cards from banks and retailers alike. The limits on your older cards will continually be eligible for increases and you'll be accepted for cards that are more exclusive, offer higher starting limits with all sorts of various perks; from travel points to cash back. Earning more credit means a better overall score when you use it strategically.
Just as a snowball gets larger and larger as it maintains shape while rolling it along, the same is true for credit. The potential for impressive amounts of available credit is a real possibility for anyone who is truly motivated. You'll probably never need to use it all but having many strong lines of credit will also help maintain low utilization rates, in turn enhancing your overall score.
With a Higher Credit Score You'll Get Loans Easier
Assuming your debt-to-income ratio remains healthy, a higher credit score makes getting loans a breeze. Forget the mountains of paperwork, pay stubs, bank statements, proofs of assets, or collateral required when applying. If you've managed to hold a robust profile that clearly displays a solid history and diverse lines of credit, you'll be able to get a loan with less hassle than most people. When your credit report is clear, concise and shows a high amount of stability and creditworthiness, lenders won't be concerned. Your score and your past actions will speak for themselves.
Think about how nice it will feel to walk into almost any lending institution with complete confidence. You won't be walking out feeling let down or hopeless after being informed that you don't quite meet the criteria, or that the only way to get a loan is by accruing mountains of interest. Being denied a loan will not be an issue for you, and in some instances you'll have lenders actually pleading for you to apply. Imagine that!
With a Higher Credit Score You Can Get No-Interest Auto Loans
Surely you've heard on the radio or seen on TV ads from automakers or dealerships promoting "no down payments and no interest for 36 months for qualified buyers", right? We'll the people who fall into that group of qualified buyers must have a solid credit history, a high score, a low utilization rate, and a great debt-to-income ratio. In other words, they need to have really good credit and a long history of it. By utilizing healthy credit practices and walking into the dealership with a rock-solid credit report you can be one of those people who walks out on the same day without having spent a dime, and with no interest due on your payments for a full 36 months. What's better is the fact that 36 months is a full 3 years.
Would you like to have a new car every 3 years? You can do it and never pay any interest by taking advantage of these deals in a routine fashion. Before your interest-free period is up, go back to the dealership and seek the same deal on something else. Assuming your credit has grown even more in those 3 years, you'll qualify over and over for the best deals which will save you a lot of money and enable you to drive whatever you can afford.
With a Higher Credit Score You Can Easily Qualify for a Mortgage
Are you thinking about buying your first home? If you want to make the best of the situation you'll need solid credit. If you can't prove your creditworthiness you will be required to make a much larger down payment, and suffer in the long-run by accepting a higher interest rate that can reach into the hundreds of thousands of dollars over the span of a 20-year or 30-year mortgage. In fact, you might not be eligible for the amount you're seeking or could be outright denied a mortgage completely. A higher credit score and a beefy profile will prevent this from happening and almost guarantee that you'll be happy with the terms of your mortgage agreement.
Additionally, maybe you already own a home but found a deal on something that's hard to pass up, like a rental property or a vacation home. With a higher credit score you can buy that second home as a long term investment and even allow it to pay for itself through rental income. Many people with homes on Airbnb are doing exactly this - renting their second, third, or fourth home for short-term stays and not only covering their mortgage payment but earning 3 to 4 times what they're required to pay. Put the extra in your pocket or use it to pay your mortgage early - either way, you're winning.
With a Higher Credit Score You Can Do Things You Never Imagined
Imagine a trip to Europe for a week, an island getaway, or flying first-class each and every time you fly. Now imagine doing it completely free. It sounds great doesn't it? We'll when you use your credit properly you can reap great benefits.
One of the things that people with high credit scores do is buy everything they can using credit cards and then pay it all off at the end of the month (or whenever the due date is). That doesn't mean maxing-out your card just to try and earn points, so please pay attention. By using your cards to buy the things you already must buy (gas, groceries, paying recurring bills, making car payments, etc.) it's possible to earn cash back, travel points, and hotel stays very easily - especially over long periods of time or if you spend a lot each month.
Either way, you can make almost every purchase count and it all adds up. Today's credit cards offer all kinds of special perks, especially the ones that are harder to obtain and require exceptional credit for approval. The internet-of-things and cross-payment platforms have made it possible for card issuers to link up with all sorts of businesses that offer discounts to their cardholders, too.
As we mentioned earlier, there is a snowball effect that comes into play at a certain point, and if you use a few simple tricks you'll be able to enjoy things without actually having to spend your own money. And even when you are spending your own money, you'll often spend a lot less, receive free upgrades, and get access to products and events that are unavailable to others. You really can't complain about that, can you?
What About People Who Don't Have High Credit Scores?
There's a lot of benefits to having a high score, but if you don't, that doesn't mean your life is over. For example, if you're credit is good but lacks the history or age to qualify you for a home loan, you can always count on other options to increase your credit score such as becoming an authorized user on someone else's credit card. If you don't know anyone who can help with that, don't fret - there are companies who offer tradelines for sale to rapidly raise your score and get you approved for the loan(s) you need. By implementing tradelines, you'll at least get a lower interest rate and even be eligible for credit cards that would have denied you in the past. It's all about how you plan and the techniques you chose to employ.
Sometimes being in debt is a major burden, especially if you fall behind on payments or become delinquent. However, when you have debts you know you can handle, life isn't so bad. Don't get into bad spending habits because they're easy to fall into and very hard to recover from. Instead, learn how to manage your money the to the best of your ability. Budget accordingly, whether you make a little or a lot of money. Living within your means is a great way to secure financial freedom, grow your credit, earn a high credit score, and enjoy everything that comes with it.
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