Different institutions have varying standards on what a good credit score is. Generally, however, a score between 580 to 670 is tolerable, 670 to 740 is good, 740 to 799 is very great, and a score exceeding 800 is excellent. Clients with scores above 740 are frequent loaners that pay their monthly dues on time, all the time.
The better your grade is, the higher your chances are of securing the best loan terms available. Those with good credit scores will be able to negotiate on the terms to land a cost-efficient, low-interest, and flexible plan. You can use these loans to fund your business, purchase a house, or acquire a vehicle.
Other benefits of having a good credit score include:
Better Credit Card Plans
Clients with high credit scores who frequently take out loans are considered premium clients and may qualify for the more elite credit card options. These include accounts with lower rates, better rewards programs, and free miles.
The best way to increase your chances of qualifying for premium credit cards is to upgrade your existing cards regularly. It might cost a few bucks today, but once your score spikes, you’ll be able to get back all the money you spent and more.
Lower Rates on High-Value Loans
Even a small discount on high-value loans spread out over multiple years could add up to tens of thousands’ worth of savings. This is very beneficial for those planning to take out a large loan—property, business, or vehicle—loan in the next few years. Just imagine, if you get a meager 2% discount on a $1,000,000 loan, you’ll already be saving $20,000!
Better Leasing Options
Landlords that rent out high-value properties often check the prospective tenant’s credit score. Doing so is a good way to gauge their financial capacity. Plus, your landlord would want some form of assurance that you’ll be able to pay for dues one way or another in case worse comes to worst and you experience financial problems.
Can Qualify for Loans Faster
If the banking institution sees that you frequently take out loans and never miss payments, they’ll treat you as a premium client who can be trusted with multiple high-value loans. This means less waiting time during the application process. Clients with good credit scores can even qualify for a high loan in just 24 hours after submitting the application papers.
What is Considered Bad Credit?
It’s hard to universally establish what counts as a poor credit score because the actual value can be subjective. What might be a terrible financial situation for others might not be so bad for some.
