Your credit score can definitely help you to increase your wealth and make your financial life secure in future. If you go through the previous records you will see, people with good credit scores are always regarded as safe consumers by everyone including finance companies, auto lenders, credit card companies, banks, landlords, and utility service providers. It seems your credit worthiness and financial stability entirely depends upon your FICO score. Therefore your goal must be to maintain your credit score at least above 750 points. It not only helps you to increase your wealth in your later life but also present you as a safer risk in comparison to someone with a lower credit scores. Therefore keep track of your credit score, monitor it and protect it regularly. Here are some ways which can help you to build your wealth with your credit score in future.
Mortgage:
Contact your mortgage lenders and request them to reduce your interest rates. You can apply some negotiation technique in this regard as well. You can tell your lenders that you have been offered better rate of interests by other companies and you are now likely to agree to their proposal of refinancing your mortgage. It can save you a substantial amount of money which is from 300$ to 1000$.
Auto loan:
The same simple strategy can work while you negotiate with your auto finance companies. You can tell your auto finance lenders that your credit score has jumped high and other rival auto loan companies are offering you a better interest deal for this. This strategy can work since many lenders befool their clients by lowering their monthly payments but increasing the loan terms. As a result at the end of installment payments you often find that paying a lower monthly installment for a longer period of time actually cost you a lot of extra money in total. This time ask them to lower monthly bills without extending your term any more. This strategy can save you around $50 per month.
Credit Card:
If your credit score is above 750 points, you can negotiate with your Credit Card Company as well. Explain to them about the outstanding improvements in your credit score and tell them you deserve a reduction in your credit card interest rate now as a reward. The interest rates on credit cards are usually very higher in comparison to conventional loans. This is your golden opportunity to negotiate a lower rate with your credit card issuer. Usually they don’t entertain such requests immediately. Don’t lose your patience, the credit card companies need at least sixty to 90 days to make the final decision in this matter. If you close your account suddenly in a hurry it could damage your credit score and slow down your attempt to increase wealth in future. In case their response in not in your favor you always have the option to switch to some other company but choose the one which offers you with the lowest rate and treats you as a preferred customer.
Auto Insurance:
You can also use your credit score to get a lower premium on your auto insurance policy. Request them to lower the rate, as your FICO score has been improving with time. If the insurance company turns down your request, you can opt for other auto insurance companies as well. It won’t take you long to find another company that is willing to offer you an auto insurance policy with lower rates on better terms. Every year you can save at least $100 by applying this strategy.
So, the bottom line is if your credit rating is good you can surely use it to increase your wealth in the long run. You must put constant effort to protect your credit score and in return it will help to attain financial security in the near future.
Kimberly J. Howard, CFP® Blog 