Can a Higher Credit Score Really Save a Consumer Money?
The answer is “yes,” the potential for a consumer to save money because his or her credit score is higher, is tremendous; we’re going to show you how.
Below, we’ve noted examples of where you can realize savings because you have a higher credit score, and you don’t have to be a borrower for some of these savings either:
- Renting a home will be easier and you stand to save money on monthly rent and on total deposits with higher scores. The property management arm of inVIVO realty knows first hand what landlords and property owners are willing to do for prospective tenants who have higher credit scores. Property management companies and landlords will look for that credit score as a quick way to see what’s happening with a prospective tenant.
- Insurance rates for home or rental, automotive, personal umbrella and even small business fluctuate depending on what a consumer’s credit score is. The higher your credit score, the lower your premium will be; insurance companies don’t know their customers and as a result, rely heavily on the credit scores of their clients believing that a higher credit score indicates the insured party is a better decision maker. Most states in the U.S. allow credit-based insurance scoring, where insurance companies assess your risk based on how well you handle your money.
Please note that there are a variety of other factors that go into an insurance company’s evaluation of your rates; insurance companies don’t rely solely on your credit score in the underwriting process and insurance companies cannot penalize you for a bad score by raising premiums, denying coverage or canceling your policy; they can only discount and save you money on your monthly premiums.
Nationwide Insurance has expressed that although not all states allow the use of insurance scoring to be a factor in determining insurance premiums, “it is statistically supported that those with an unfavorable insurance score are more likely to file a claim. The insurance score is often credit-based. It is a combination of many factors within your credit report, including:
- Financial accounts — number and type, such as installment, revolving, etc.
- Past payment performance — number and timing of late payments
- Stability — length of credit history or new credit
- Adverse public records — collections, civil judgments, tax liens or bankruptcies
- Debt — balances owed compared to limit available”
- Gaining employment at a higher level is easier when employers feel you make good decisions with your personal finances. While potential employers don’t have access to your credit score, they might request a modified credit report for insight into your credit history. Read this article which summarizes how employers are looking at your credit to evaluate you as a potential employee.
- Borrowing money is less expensive. With over 105 million car loans outstanding in the Unites States, the chances you’ll need an auto loan at somepoint in the future is relatively high. What about a home equity loan to remodel your business? Or a business loan? If you ever want to get an auto loan, a home equity loan or a business loan, having a good credit score will qualify you for lower interest on nearly every kind of personal loan you might ever need.
And if you’re applying for a mortgage, you could save as much as 1% on your interest rate which could translate to $200 per month over the lifetime of a 30-year mortgage on a $300,000 house; in this case, you would have an additional $72,000 in your bank account when the home is paid off.
- Prepare today for the needs of tomorrow; no one person knows what can happen to them or their family or their loved ones in the future, whether that future is a week in front of them or years in front of them. When you have a good credit score, you’re much more likely to meet all lending approval guidelines, allowing you to borrow money when you need it most. This, for all of us at the inVIVO financial family of consumer finance services, is what it’s all about; good planning and preparation for the uncertainties in our lives.
- Build a good reputation; an individual with a good credit score doesn’t have to look very far for favorable offers and in fact, many of those favorable offers are looking for that individual with good credit because with good credit, a consumer has strong creditworthiness. This can be very handy when you want to refinance existing debt, take out a personal loan or upgrade to a better credit card with your current issuer, all of which will save you money in interest.
- Take a more responsible and practical approach to caring for your personal finance “credit hygiene.” Like anything you’re caring for, once you have your credit worthiness good shape, the maintaining of it becomes relatively simple; much like vacuuming your carpet or sweeping your floors.
In a Nutshell
Lenders are tighter now than ever. Insurance companies and employers need desperately to understand better, what kind of decision makes they are insuring and hiring, respectively, and an individual’s credit history is a very good indicator of the approach an individual takes to managing what is a very important aspect of his or her life. Creditworthiness, as we like to call it at inVIVO credit, is not just a tool to help retailers gauge how responsible you are as a consumer; it is a tool for consumers to use to help them save money. We believe consumers should be managing their credit as proactively as they are managing their daily agendas.
inVIVO financial is here to assist consumers achieve the best results in there personal finance transactions. Contact the inVIVO financial consumer advocacy team today with any questions you may have about credit and how credit can affect your daily living.