There are ways to leverage your near-perfect credit score
For those who achieve an “average to excellent” FICO credit score (660 and above) or an “excellent” score (740 and above), there are many ways to take advantage of this achievement by opening new doors for opportunity and savings. As a real estate/financing professional, you can share these tips with your client base to bring value added and allow your clients to do further business with you. Here is some credit adviceforthose with great credit can take advantage of (but, you also must be aware of the potential downsides).
Many credit cards can charge an exorbitant interest rate, and these rates coupled with debt can lead to large payments and wasted money. In fact, the average credit card debt in the US is currently over $6,500. Fortunately, those with great credit are eligible for a method to pay debt off rather quickly and easily. People with great credit should be eligible for a 0 percent interest rate on balance transfers, which essentially allows one to transfer credit card debt from a high interest card to a no interest account for a certain time period.
It’s important to consider few things before transferring a balance:
Transfer fees:
Some of these cards will slap on a 3% fee for transferring balances, and you should make sure to find a card that doesn’t charge this fee.
Opening new credit reduces your average age of credit which will drop your credit scores. Do not open new cards if you plan on applying for a mortgage or loan within 2 years since scores may drop substantially after opening new credit. Make sure the cards you open are done strategically and not often.
Credit Card Upgrades
High FICO scores will also make consumers eligible for the best credit card offerings. Many of the cards offered to those above a 660 score have better benefits, rewards, and perks unavailable to others. In addition, these cards often offer sign-on bonuses. Clearly if your scores are above a 740 the perks are even better. However, consumers have to make sure that they follow our tips when opening a new card in order to maintain their score (see the tips here) and should contact us with any questions.
Home Refinance
Those with great credit can also take advantage of historically low home interest rates. With a higher FICO score, many can lock in a much better rate for their mortgage. Even a small improvement in interest rates can lead to savings in the hundreds of thousands over the life of a mortgage.
Negotiating better interest rates or transfer offers with current credit cards
If you have existing cards and have excellent credit scores you can ask the creditor for lower interest rates or transfer offers on your existing cards. This is great if you don’t want to reduce your scores by opening new credit.
Requesting limit increases on current cards
The higher your credit limits the more leeway you have to charge without reducing your credit scores. Since balance-to-limit ratios on revolving credit (credit cards) must be under 10% for the best score increases, it is great to have high limits. Calling your creditor and asking for a limit increase can help your scores. The creditor will pull your credit reports and scores for approval so the scores can drop a little from the inquiry. If you have had many third party inquiries during the year it could drop scores significantly and it might be best to wait a year from the latest third party review.
Negotiating better interest rates or transfer offers with current credit cards. If you have existing cards and have excellent credit scores you can ask the creditor for lower interest rates or transfer offers on your existing cards. This is great if you don't want to reduce your scores by opening new credit.
“A high credit score means that you will most likely qualify for the lowest interest rates and fees for new loans and lines of credit,” McClary says. And if you're applying for a mortgage, you could save upwards of 1% in interest.
What are benefits of having a good credit score? - more loan offers to pick from. - better interest rates on your loans. a loan backed by collateral (something valuable such as a car, home, boat, etc.)
Ask for a Lower Interest Rate. First, the good news: Two out of three credit card holders who ask for a lower interest rate get their request honored. ...
What financial behaviors will typically lead to a low credit score? Maxing out your credit cards will typically lower your credit score. Your payment history and your amount of debt has the largest impact on your credit score.
Credit card issuers use credit score cut-offs to help determine which cards you may qualify for. Good credit may help you qualify for lower credit card interest rates, cash back rewards, higher credit limits, and other perks. Many of the most generous reward cards require excellent credit for approval.
Convenience. Using credit cards when you travel or shop is more convenient than carrying cash. It also provides a handy record of transactions. Using a credit card also may give you some bargaining power if there is a dispute or disagreement involving a purchase.
You can enjoy using something you need as you pay for it. Get something you can't afford now. If you can't af- ford to pay cash for a car or other large purchase, using credit allows you to get it now. May get better service on something bought on credit.
A higher credit rating grants borrowers the advantage of securing loans at lower interest rates. Credit ratings also facilitate trading fixed-income securities on the secondary market, providing traders with valuable information for making informed investment decisions.
Companies use credit scores to make decisions on whether to offer you a mortgage, credit card, auto loan, and other credit products, as well as for tenant screening and insurance. They are also used to determine the interest rate and credit limit you receive.
Although ranges vary depending on the credit scoring model, generally credit scores from 580 to 669 are considered fair; 670 to 739 are considered good; 740 to 799 are considered very good; and 800 and up are considered excellent.
Introduction: My name is Kerri Lueilwitz, I am a courageous, gentle, quaint, thankful, outstanding, brave, vast person who loves writing and wants to share my knowledge and understanding with you.
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