How An Excellent Credit Score Has Helped Us Save Money

Having excellent credit scores has helped my wife and I save in many ways over the years. We didn’t always have great credit scores.  Both my wife and I had our periods of credit card debt.  Along with that came the occasional late payment and the regular stealing from Peter to pay Paul lifestyle.  But we both wised up and, over time, eliminated our credit card debts.  With that came better and better credit scores.  We’ve discovered that having a good, or great, credit score has its benefits.

Here are some actual ways we have benefited and saved from our excellent credit scores:

Car Loans

We’ve bought two cars together.  Each time, before we went shopping for a car, we checked our credit scores.  Knowing our credit scores before hand allowed us to confidently shop for a car that had a low interest rate.  Our mini-van has an interest rate of 0.9% while our compact is 2.9%.  These are much lower than the average new car loan and were only possible because of our credit scores.

Renting

As we were closing on the sale of our co-op we started looking for a place to rent for a bit.  Again we pulled our credit scores to have in hand to show prospective landlords.  Having excellent credit scores allowed us to show our landlord that we were very low-risk in not paying our rent in time.  This made us preferable to other people looking and allowed us to put our apartment on hold until our co-op sale was final.  High score means you pay bills on time; low score means you are a risk.  Which do you think a landlord wants to see? [Note that we pulled the myFICO scores ourselves to avoid having each prospective realtor or landlord pull them.  This saved us money and time.]

Car Insurance

We get a preferred rate on our car insurance due to our credit scores.  For an insurance company, a high credit score equates to high responsibility.  In the eyes of our car insurer we are seen as more responsible drivers and less of a risk of using our automobile insurance.

Get a FREE car insurance quote from GEICO.

Lower Credit Card Rates And Offers

We’ve been paying off our credit cards in full for some time now.  Still, I’ll call a card company to make sure we have the lowest rate possible in case we ever need to carry a balance.  Our credit scores help insure better credit card interest rates.  It also gets us better offers such as 0% interest credit cards.  I signed up for a 0% credit card when we were planning our wedding and used to card to earn points.  We put the money in an online savings account to earn interest during the interest rate term, which for us was a year.  Because of our credit scores, we got a nice bonus after our wedding by cashing in our points for gift cards.

Take a look at some great Credit Cards for Excellent Credit.

Cell Phones

Its been about two years now that I signed up for two Sprint SERO accounts.  When I called to sign up, one of the requirements was a credit check.  They were going to mail us the phones so I guess they wanted to make sure we weren’t going to run off with them.  Know what our cell phone plan costs?  Thirty dollars each!  Most plans today with unlimited data and texts cost more than that for one plan let alone two.  Credits scores for the win again!

Mortgage

When it comes time to get a mortgage to buy a house our credit scores will go a long way to make sure we get the best rates out there.  A couple of tenths of a percentage point can cost thousands, or more, over the life of a 30 year mortgage.

As you can see, an excellent credit score can go a long way to help you save money! If your credit score isn’t as high as you would like, or you know you are going to need your score for a loan, or something else, then get working on improving your credit score now!  A great credit score can save you thousands!

How has a good credit score helped you?

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Published or updated April 21, 2014.

Comments

  1. It’s scary the amount of money a good credit score can save you, especially with a mortgage.

    I think it’s safe to say a good credit score can add an extra $100,000 over your lifetime with the advantages it brings.
    .-= RJ Weiss´s last blog ..25 Ways You Can Improve Your Finances Now =-.

    • Indeed! A few points on your score here and there can cost you a lot. And having a good score isn’t hard, its mostly about paying your debt on time.

  2. Great credit got all deposits waived for utilities ever since college. It also got us a 5.375% interest rate for our 15 year mortgage in early 2007 when the normal rates were around 6-6.5% and a 4.6% interest rate on my husband’s used car in 2008 when the average used car rate was around 6.5-7%. Yep, great credit is a powerful tool.

    • I forgot about having deposits waived! That’s a great one. A great credit score allows you better use of your cash flow.

  3. what a great and motivational post! I am working on getting out of debt and it is always nice to have reinforcements on why I want my credit score to go up!

    • The biggest factor, as I mentioned before, is to pay on time. Getting rid of debt helps but paying on time is HUGE!

  4. Sweet, Now I’m all sorts of excited! I have excellent credit from making on time payments and more importantly a long credit history (8 years older than I am) because I was an authorized user on my parents account. I can’t wait to save a bunch of money when I make big purchases in the coming years!
    .-= Daniel´s last blog ..The Different Types Of Student Loans =-.

  5. I agree that a great credit score can help save money in many ways, but some people obsess over their FICO scores. I like to think a great personal finance goal is to reach a point where credit score is not as important in your life. For example, we have zero debt (I am not smug…it took WAY too many years to get here) so mortgage, credit card rates and car loans are irrelevant to us. Of course, because insurance rates are still dependent on our credit score, it is still a factor in our lives…just not as big a factor as those who are still working on becoming debt free.

    • I don’t obsess about my score but I’m going to protect them as best I can. People should be aware of their credit and the impacts theirs scores have on their lives. Its great to get rid of debt but there are more ways than loans that a credit score can help you. More and more, companies are using credit scores as part of the hiring process.

  6. Hey Joe,
    These are all legitimate ways to save money with a great credit score. Here’s another one that kind of goes without saying.

    If you have a great score, that probably means that you also have very little credit card or other revolving ‘bad’ debts. If you do, you probably pay them all on time or in full every month. This alone will save you loads in interest payments and fees.

    As a point of caution, people need to be aware that checking their credit score on a too frequent basis could actually hurt their score.

    Thanks for sharing,
    Guy
    .-= Guy G.´s last blog ..Tips on Budgeting – The #1 secret that makes a budget work =-.

  7. Credit and credit scores are everything in America. Its the difference between a $320 car payment and a $490 car payment for the same priced car. Actually, a website that taught me a lot about credit and is very helpful is http://www.myfinancedoctor.com. People also have to understand credit is not additional income or money it is just an extension of it.

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