Raising one’s credit score in 2019 can give people many benefits, according to many analysts. Aside from saving creditors money, they can get many perks like better loan rates; increased chances of holding top credit cards, and lowered security deposits.
Credit Score of 750 is Enough
Greg McBride, the chief analyst at Bankrate, said getting a FICO score of 750, which is a bit higher than the average can already be considered high in the standards of banks and lending companies. McBride added he is not advising people to get a perfect 850, because the benefits are the same as long as it in the “excellent” range.
The average FICO credit score in the US reached a record high of 704 in 2018. This figure is just near the bottom of the “good” range. Most credit card providers and lenders only approve applications from people with an excellent or good FICO score.
Benefits of Having Excellent Score
Credit analysts say that people who maintain the excellent FICO score can enjoy many advantages. Firstly, they can get better loan rates. NerdWallet revealed that an excellent rating could make you eligible to obtain a mortgage rate that will save you over $10,000 in interest over 30 years. You can also save thousands of dollars from a five-year car loan if you have an excellent credit score.
Having an excellent credit score can also enable you to get a luxury travel card with huge cash back and rewards points that may even help you get out of debt. A score that falls within the good-to-excellent range will also allow you to get a lower interest rate.
Having an excellent credit rating can also lower security deposits for your lease application. Part of the screening process of many landlords, particularly large management companies, on rent applicants is a credit check. If you have a poor or average background as a renter, the landlord might require you more collateral to offset their perceived risk, according to Odysseas Papadimitriou, CEO of WalletHub.
Advice on Improving Credit Score
To improve credit score, Jared Hecht, CEO and co-founder of Fundera, said creditors should pay their personal and business debts on time and in full. They should pay their mortgage, rent, utilities or credit-card bills on time. Creditors should also spend conservatively when using a credit card.
He also advised creditors to take advantage of getting the free annual credit report and consider signing up for a credit-monitoring service from companies like Credit Karma.