Credit card companies and loan officers may all have slightly different definitions of what credit score constitutes “poor,” “fair,” and “good.” But all of them agree that 750 and above puts you well into the “excellent” credit score territory. But what does having between 750 and 800 (the highest possible score) translate to in terms of benefits?
1. Speedier Approvals
If you apply to rent an apartment with a “fair” to “good” credit report, the landlord will need to weigh other factors before deciding whether to accept the application. Potentially, someone with a lower score can make a case for mitigating circumstances that still make him a good potential tenant. But it takes time and effort for that landlord to double-check bank statements, employment history, and personal references.
If you have an “excellent” rating, on the other hand, a landlord will likely have all the assurance needed to fast-track your approval. The same holds true for other big-ticket rental or lease items.
2. Lower Credit Card Interest Rates
Credit card companies are particularly accommodating about lowering their customers’ interest rates when their credit scores improve. Obviously, their 750+ customers are in the best position of all. Some credit card holders mistakenly think that their interest rates will be automatically adjusted to meet their rising credit scores. That is usually not the case, unless the credit card company is offering a newer iteration of the same card.
What that means, in practical terms, is that the most reliable way to snag that lower interest rate is to call the credit card and request it. Customers with a good payment history — especially those with a 750+ credit score — are apt to get swift approval for the credit card’s best available interest rates.
3. More Bargaining Power With Your Credit Card
Lower interest rates aren’t the only advantage that credit cards offer to their customers with excellent credit scores. You may be able to score a cash bonus when you sign up for a new one — or request that bonus upon annual renewal. If the card charges an annual fee for the majority of its customers, it is likely that they will waive it for those with superior credit scores. (Again, this may be something you need to call and negotiate, rather than have it happen automatically.)
Among the other little-known benefits for “VIP” credit card holders? If you need more credit, your request can be handled internally, without it showing up on your credit report. You can also get more perks, like earning extra airline miles to use for free or deeply discounted fares for future air or rental car travel. You may also be able to get foreign transaction fees waived when traveling internationally, as well as a card with a special chip that works at international ATMs and cash registers.
4. Waived Late Fees
Even people with an excellent score can have life events that prevent prompt payment. Whether these have to do with bank errors beyond your control or personal emergencies, they happen to everyone. When your statement comes, you may notice a hefty fee corresponding to that late payment.
For people with an excellent credit score, a simple phone call to the credit card may enable you to get it waived. Ask to speak to a supervisor, if needed, and request a “goodwill adjustment.” Customers with good payment histories and overall high credit scores often have little trouble having those fees removed from their bill.
5. Better Home and Vehicle Rates
For most people, a home is the most expensive item they will ever purchase. A decent credit score will probably get you approved for a home loan of some type. But an excellent credit score will allow you to have a lower interest rate. That gives you more bang for your buck, which translates into lower monthly payments — or, possibly, to look at homes that would have been out of your price range with higher interest rates.
In terms of both immediate and long-term savings, lower interests rates pay off big. For example, for a $200,000 home, someone with a 750 or higher credit score could pay about $200 less each month than someone with a credit rating of about 630. Over the life of the mortgage, that becomes a savings of an astonishing $70,000!
Excellent credit often makes a difference in what kind of car or truck you can afford. Someone with a “poor” credit score of under 650 might not even qualify to buy a $25,000 vehicle. A “fair” score would result in a monthly payment of about $600 for a four-year loan, whereas someone with an “excellent” credit score of 750 or higher would qualify for a four-year loan with payments of only $545.
The same principle applies to vehicles that are used recreationally, such as a “Class A” motor coach, ATV, motorcycle or a speedboat. Whether you can be approved for the toy of your dreams at all — and if so, what they payments will be — is greatly affected by your current credit score.
6. Increased Opportunity
We are living in the era of the instant credit check. That means that it becomes increasingly possible that everything you seek in life can be helped with a superior credit score.
For example, personal loans can be used to pay for a number of dreams, including a vacation or wedding. Or you may be looking to upgrade your home through renovation. Some people even use personal loans to finance moving costs, debt, medical bills and funeral expenses. There will always be various types of personal loans available. But how much you can qualify for, and how much your monthly payments will be, is greatly affected by your credit score.
Like or not, personal dreams can be made or broken by the state of your current credit score. It’s become increasingly common for employers to include a credit check for professional positions. Even more startlingly, more people are starting to check a love interest’s credit score before committing to be in a couple. In fact, there are even upscale dating apps in which people can seek their preferred credit “match.”
So what does your credit score say about you as an employee, boyfriend or girlfriend? After all, it’s not like you are seeking a loan in these situations. Many analysts believe that poor credit is an indication of whether or not a person is goal-driven, reliable, and a hard worker.
Fair or not, an excellent credit score gives you an advantage in matters of love and employment, along with goals for which you need a personal loan.
If you haven’t hit that 750+ credit score, there are several things you can do. The most obvious is to pay your bills on time — and try to pay more than the minimum each month. Keeping your credit card and credit line balances low is also important.
In addition, try to strike a balance between having some loans and credit cards — but not too many. These are just a few sure-fire ways to plan your way into that enviable “750 + Club!”
Susan McCullah is an established writer who has created dozens of informative articles about credit scoring, identity theft, budgeting, taxes, debt, and finance. She has worked in the Credit Reporting industry for 15+ years and is FCRA certified. Susan regularly conducts in-person presentations and webinars on the topics of credit scoring formulation, raising credit scores, and identity theft.
