Generally, people who have a credit score of around 780 get most of the same benefits as those whose score exceeds 800. Nevertheless, many people like to strive for perfection, and there are certainly many benefits associated with having a near-perfect credit score.
You can get a near-perfect credit score by paying your credit card charges off in full and on time each month, never missing payments, and never having outstanding debt for long periods of time. You also need a good mixture of installment and revolving credit. Creditors are impressed when you can pay off large loans such as mortgages in relatively short periods of time (compared to other borrowers).
The number one benefit of having a near-perfect credit score (which is anything over 800 because the maximum is 850) is that you can demonstrate financial intelligence and integrity. You can be proud that you have attained near-perfect status, and banks and lenders will be impressed at your commitment to financial strength. If you ever require a loan or mortgage in the future, you can negotiate from a strong position and will never have to settle for high interest rates. Bankers and lenders will treat you with greater respect and assume that you are worthy, responsible, and know what you are talking about.
Low Interest Rates
Interest rates are almost always closely linked with your credit score. People with excellent credit scores qualify for the lowest interest rates. This is a great benefit in times that you cannot pay your full balance because you dont have to worry too much about interest charges. This leaves you with a greater financial freedom and you will be able to pay off your balance quicker than those with high interest added on top of their balance.
Your credit score is not the only aspect of your finances that is taken into consideration when you apply for a loan, but it is one of the biggest aspects. Your current debt and your current income are also taken into consideration. Nevertheless, with a strong credit score you can show lenders that you have a stable history of repaying your debts, and this in itself strongly increases your likelihood of being accepted for a loan.
Higher Credit Limits
With a near-perfect credit score, you are likely to be approved for an increased credit limit. This means that your total available credit will be greater and you will be able to borrow more each month. Creditors and lenders will see that you are a top-notch borrower and will feel at ease offering you much higher credit limits. Having a higher credit limit makes it easier to stay within 30% of your credit limit, whilst still using your credit card as much as you need to. Having an increased credit limit is particularly useful after a pay rise, job change, lottery win, or bonus.
Insurance companies check your credit score because they believe that a low credit score is somehow associated with a greater likelihood to file claims. As a result, people with low credit scores are punished with high interest rates on their car insurance. With an excellent credit score, you can get the best deals. You will pay less on your car insurance than other people because you will benefit from low interest.
No Security Deposits
People with low credit scores usually have to pay an inconvenient security deposit when they get a cell phone contract or sign up for a new utility (such as electricity or cable). This is because companies doubt their ability to pay their bill on time each month. With a near-perfect credit score you not have to deal with security deposits and are usually offered better deals on cell phone contracts or utilities.
People with higher credit scores qualify for better deals. You have the freedom to shop around for a deal that suits your financial situation and you can negotiate with lenders for greater flexibility. If you move location and buy a new house for example, you might need a new mortgage. Rather than having to settle for what you can get, you can feel free to decline any deals that do not suit you.
In summary, having a near-perfect credit score can make your financial life considerably less stressful and more flexible. You can also enjoy being perceived as a reliable and respectable borrower. You will benefit from the highest credit limits and the lowest interest rates. However, most of these benefits are available to anyone whose credit score is at least 780. The only real distinguishable perk of the 800+ credit score club is that you can feel proud of your attainment.
Author Sam Jones is often asked for advice about low interest credit cards. He suggests uSwitch.com comparison website is the best place to do credit card comparisons and find the best low interest credit card deals
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