5 Amazing Ways a High FICO-Registered Score Saves You Money
We live at a time where a credit score holds an important vote card in your financial affairs. Besides being viewed as a milestone in personal finance, it can save you substantial amounts of money as well as help you access invaluable opportunities.
When determining your creditworthiness, lenders will take a look at your FICO score along with a credit history. Depending on the score, interest rates, as well as funding limits, are determined. Normally, people with higher credit scores have an easy time with credit services. Consequently, better credit scores lead to more opportunities to save money. Here, you will learn how FICO-registered scores help you save money.
Access to utility services that are friendly to your monthly budget
Most utility companies will conduct a credit check before they can start offering services. If your credit scores are wanting, chances are that you’ll be required to pay some deposit to seal the deal. On the contrary, individuals with perfect credit scores may not be asked to pay any down payments.
With non-essential utility services, a poor credit score can lead to a rejection by a service provider. But for basic utilities with non-fixed rates, you can easily end up paying more for the same services. Basically, companies consider people with lower scores as risky business and likely to make delayed payments.
You can get insurance products with lower rates
In addition to important personal details, insurance providers can check your credit scores before extending their cover. It’s a common belief among insurance companies that if a client has a high credit score, they are less likely to file unnecessary claims. Similarly, good records will help you get access to a variety of products to choose from.
Unfortunately, lower scores can make some providers avoid you because they think it’s too risky dealing with you. If accepted, providers have a tendency of charging more for the services offered.
Getting a mortgage loan is easier and cheaper
A home is probably the most valuable purchase for average people. However, lenders will put your scores under scrutiny and determine how much interest the realisticloans.com will accrue. Considering that a mortgage is paid over a long period which could be around 30 years, this means lower rates will save you more money. Normally, attractive FICO scores will save you thousands of dollars in interest on loans paid for over a decade.
But there are people who might prefer leasing as opposing to buying a home. Recently, the number of landlords requiring a credit report has been on the rise. Although FICO scores are not considered in isolation, landlords have a tendency of asking higher security deposits when they realize a client has low creditworthiness.
You get better loan products with low-interest rates
When seeking loan services, your credit history is an important factor that determines rates and terms. With a good FICO score, it’s possible to get a loan at prime rates which mean that terms are quite flexible and the interest rates are considerably low.
On the other hand, poor records will lead to a series of rejections by traditional lending institutions. If you are lucky enough to be accepted, the rates will be subprime and you end up paying lots of money in interests and fees. But it’s also common to see people taking payday loans for want of other options. Once this happens, the chances of getting trapped in cyclical debt rise significantly.
Managing your credit card debt becomes easy
Credit cards have become part of our daily life and therefore more of a necessity for most people. But at times, you can find yourself in a debt that has to be quickly managed before it gets out of hand. In such moments, you are in need of the best option to safely climb out of debt. And in times like these, you realize just how important credit scores are.
It only takes a few points lower than the acceptable score to be stuck in a contract with ridiculously high interests. The beauty of high FICO scores is that you can quickly negotiate a better repayment deal with your provider. Alternatively, you can qualify for a credit balance transfer to an interest-free credit card or one with low-interest rates.
In this age, a perfect credit score is a valuable achievement due to the benefits you can have. Ideally, it is your responsibility to take charge of your financial profile as well as your future. If you want to enjoy above average benefits every time you make a transaction, it is high time you made a decision to improve all aspects that affect your financial profile. Luckily, anyone can take small steps towards cleaning a financial profile and start saving money with most significant transactions.