Tricks to Save Money if You Have a Good Credit Score

If you have put in the hard effort it requires having a solid, high credit score, then use that score to save money whenever possible.

The most obvious and immediate advantage to those with a high credit score is that they can receive favorable loan terms, especially for cars and homes.

When you are ready to make a major purchase, it’s a good idea to apply for pre-approval for a loan prior to deciding on a home or vehicle. When you do so, ask for your credit scores – whichever ones your lender uses.

Getting pre-approved from a certain lending institution does not obligate you to use that institution when you do decide on a home or car, and it gives you powerful tools in negotiating terms for borrowing.

Besides giving you leverage when you make an offer to purchase, having the FICO score also tells you what kind of loan terms you should be getting from lenders. Armed with that information, you can shop around and push lenders a little to get the favorable interest rate and other terms your FICO score indicates that you deserve.

Use a good score to your advantage. Over 30 years, even a half a percentage off in the interest rate can save you thousands.

Another key benefit you can get by knowing your high FICO score is help in negotiating car insurance rates.

Automobile insurers use a buyer’s financial history to set insurance rates, because their actuaries (statisticians who calculate numbers based on thousands of actual customers) tell them that those people who have a poor credit history also have a high risk of insurance loss.

This means that the rates for these individuals are generally higher than the rates for individuals with higher credit scores.

Even if you are in other high risk categories, if you have your high FICO score, you can again shop around to insurance agencies and promote your good credit score. Some agents will be able to adjust your rate more than others based on that factor, and it could help you find a lower rate.

Credit card companies also make heavy use of credit scores. They will generally pull a credit report or run an inquiry (which doesn’t affect your credit) before they even send you a free offer for a new card.

If you a apply for a card, they will request a FICO number. A higher number will mean better terms, such as a lower interest rate or higher credit limit.

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