How to take advantage of great credit without borrowing a dime

As the average credit scores of Americans continue to rise, the question for many is how to use their excellent credit rating to get the most out of their lives without borrowing money or adding risk.

Capitalizing on good credit doesn’t necessarily mean taking on a lot of debt; rather, it’s about using your financial reputation for a financial advantage.

“In the right hands, a good credit score can be a real asset,” said Jordan Goodman, editor of and author of “Master Your Debt”.

From higher credit card premiums and rewards to lower insurance premiums and interest rates, hundreds or even thousands of dollars in freebies are available for those with good credit. And they don’t need to borrow a dime.

Use your lever

Nearly 40% of Americans have excellent FICO credit scores of 750 and above, according to the credit rating company Fair Isaac Corp. Half of them have scores of 800 or more, considered “super-first”. They benefit from the best loan conditions and many special treatments.

Leveraging credit to access these benefits works best for people with responsible financial habits, such as paying bills on time, every time, and paying off monthly credit card balances in full.

“You want to make sure you have discipline,” said Roger Wohlner, personal finance writer and financial planner in Arlington Heights, Ill.. “It’s for someone who has all the basics covered.”

If so, here are some ways you can use a great credit score:

  • Shop for Insurance: It is a good idea to shop regularly for better insurance rates; you can often find the same auto and home coverage for less. When you have great credit, you even get better rates.

  • Snag Credit Card Bonuses: The Marketplace rewards credit cards is scorching, with generous sign-up bonuses and rewards for consumers who can qualify. With a travel credit card, for example, you may be able to use points or miles to pay for travel if you can meet the card’s minimum spending requirements. It’s not about churning out cards or opening accounts to get bonuses and then closing them. It’s about not hesitating to apply for a lucrative card that meets your needs. If the card has an annual fee, be sure to extract more value than you pay.

“If you are fiscally responsible and enjoy playing the game to earn these signup bonuses, then you have a real opportunity to earn at the expense of the credit card companies,” said Byrke Sestok, president of Rightirement Wealth Partners at White Plains , New York.

  • Get an Emergency HELOC: Homeowners can top up an emergency fund for free by opening a home equity line of credit. The goal is not to borrow more money from your home’s line of credit – instead of leaving it unused – but to have it available in the event of a financial tragedy. “Anyone who can control their spending should have a HELOC they can operate in an emergency,” said John Eckel, certified financial planner and financial analyst in Simsbury, Connecticut.

  • Lower your interest rates: High credit scores should mean low interest rates. Make sure you pay the lowest rates for loans, especially big ticket items like your mortgage and car loan. Otherwise, you can refinance.

  • Get Interest Free Offers: Paying in full is a solid habit. But if a car dealership is willing to lend you 0% money because of your excellent credit, you can take out the loan and make monthly payments, while also putting the money you intended to bank in the bank. ‘use to pay directly, preferably into an interest account. .

  • Apply for Retailer Credit Cards: Signing up for a credit card at the cashier comes with risk if you don’t pay in full, as interest rates are usually high. But if you are diligent in paying your bills, why not apply for a card to get 15% off a $ 2,000 furniture purchase? It’s $ 300 easy. Diligence is the key. “The merchants are very good at offering carrots, but you slip for a microsecond and they hit you on the head,” Goodman said.

Tapping into your excellent credit score in this way can actually improve it in the long run, assuming you keep paying your bills on time, because credit rating formulas reward responsible use of credit. Just space out the applications so that the small drop in your scores disappears before the next one, and beware of diluting the average age of your accounts.

Even if you don’t take any of these steps now, you can rest easier knowing that you will have plenty of options in a financial crisis.

This article was written by NerdWallet and was originally published by The Associated Press.

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