Are you interested in making money with a good credit score or how to increase your credit score? Everything you need is explained in this article. Using some of these tips can help you turn your good credit score into an opportunity to make money.
A credit score is one of the most basic and necessary components for anyone who wants to get ahead in this part of the world. We want to live an enjoyable life from our teenage years up to retirement and ultimately leave behind generational wealth for our children.
Credit score allows us the opportunity to do so by providing financial institutions insight into our reliability to repay credit. Life is meant for living, not stressing about your credit score.
Luckily for you, making money with good credit and maintaining a good credit score is easy. In fact, it becomes easier after you finish this article.
Let’s get started.
1. Get cashback and rewards offers
A good credit score lets you enjoy all sorts of cashback offers and incentives. If you want to optimize your credit, then the first thing that you need to do is be on the lookout for cashback offers. All you have to do is participate in cashback programs, shop online and earn cashback.
This type of reward from purchases is one of the most direct ways to promote good credit. The money that you receive by using your credit card will not only help you rebuild your score but will also help you save money.
Additionally, good-credit consumers are receiving record rewards from banks and credit card companies. The best deals often come with bonus points you can redeem for travel, merchandise, and even cash.
Some points may be worth hundreds of dollars when accumulated over time. From more cash in your pocket to air miles and hotel points, these rewards can help you secure free travel, food and hotel stays.
Learn more: Cashback vs rewards: which is the better deal?
2. Save on interest rates
Having a good credit score is a great tool for creating wealth. It allows you to benefit from low-interest rates, low down payments, and low monthly payment levels when purchasing or renting an asset.
It can help you afford the things you want and need by extending your buying power. Having good credit also makes it easier to secure some assets, jobs, businesses, and a place to live.
If you use it properly, your credit score can be of great benefit to your finances and can even help you save money. You will be well on your way to personal financial health and may need less assistance from both the lender and the credit-scoring company.
3. Save on home ownership costs
Becoming a homeowner is one of the best things your good credit score can help you achieve. Also, being a responsible homeowner helps build your credit score. In fact, if you are not currently a homeowner, there is currently no single action that will have a larger impact on increasing your credit score than homeownership.
Buying a home is one of the best investments you can make. It will not only help you achieve a high credit score, but it will also provide a tax write-off, an asset to build equity, and a source of pride.
As a homeowner, you can use your monthly mortgage payment as a deduction on your taxes. You will also have an asset that will increase in value over time.
Learn more: How to make money with investment properties.
4. Start your business with cheap business loan
The sky’s the limit for an entrepreneur with a strong credit score. A good credit score is essential to financing any sort of business, and with a new business comes the ability to take advantage of income tax write-offs.
Having the proper resources for your business will enable you to make a profit based on your idea and hard work. With a good credit score, you have more options when it comes to raising capital for your business.
You might find that banks are willing to lend you money because lenders might feel more secure extending credit to you. In addition, some lenders might be so impressed with your creditworthiness that they offer very low rates compared to the market average.
SEE: How to start a business from scratch [with no experience].
5. Pay low insurance rates
You may be wondering how you can make money with insurance if you have a good credit score. Well, when it comes to insurance, having a good credit score can be a huge asset. Banks now want you to have insurance as part of your loan application, and car insurance premiums can go up if your score is less than perfect.
Having high credit may even mean cheaper rates on various types of home and auto insurance. Hers is an insurance fact: if you have a good credit score, you pay less for auto and home insurance. That’s right.
People with better credit scores, typically 750 and above pay less for the same auto policy than people with lower scores. The same is true for homeowners’ insurance. Due to the extended warranty, you get up to one year free. Therefore, there is no need to spend extra money on warranties.
Learn more: Best life insurance companies
6. Pay less utility bills
Open your door to better pricing with a good credit score. With a strong credit score, you can qualify to get terms on everything from utility services to credit cards that are better than average.
Many cell phone companies offer new subscribers special deals and waive hefty deposits when you have good credit. The lower your credit score, the more you’ll pay for each gigabyte of data you use. But a good credit score can get you better pricing on phone and Internet services.
For instance, power utility companies may require you to pay around $200 upfront to create an account with them if you don’t have a good credit score. They keep these funds for a year. If you default on payment during this period, you forfeit the initial deposit. Otherwise, you get a refund. This is a common practice among utility companies.
In addition, keeping your credit score high is also important when it comes to cell phone service, as it could save you some money. According to a recent survey, 58 percent of CFA respondents said that their credit score affected how much they paid for their cell phones.
7. Get better paying jobs
A lot of people have found that having a better credit score has been an added employment opportunity. A good credit score is an asset, making you more likely to be considered for jobs and making you more money.
For example, some employers like banks or financial organizations often check credit scores before hiring candidates. Poor or low credit is often seen as a result of carelessness, insincerity, or poor financial management.
You may even lose your job if you have a bad credit score simply because some collection agencies are desperate enough to call your boss or supervisors.
Strong credit can open the door to an employment opportunity, and it’s something that many employers look for.
If you’ve got a good credit score, then you’re likely to have the financial wherewithal to pay your bills on time, and that means a business or company (especially financial institutions) will be more inclined to hire you.
8. Get more leverage
A good credit score can have benefits that people don’t always think of, such as getting approved for loans and credit cards quicker. When you have a good credit score, banks and other businesses that lend money to you may give you higher lines of credit and approve bigger loans.
Your credit score determines how much you pay for a loan as well as how easily and quickly you will get an approved loan of a larger amount. Your business can automatically grow as a result, and it can also make it easier to invest in property. In the end, you are making more money with your good credit score.
People with good credit scores usually pay their bills on time, so they have a better repayment history, which can also increase their credit limits and approval chances for larger loans in the future.
In my personal experience, I came across an opportunity to make money with currency arbitrage. I could make 12 percent with a $50,000 capital within two weeks. I had a special arrangement with a lender and borrowed the money at 4.5% for one month.
At the end, I made $3,750 in one deal within a month. This opportunity would have passed me if I couldn’t get access to a lender, have collateral, and good credit score.
Tips to increase your score and maintain it
Don’t apply for credit unless you need it
First things first. There’s no need to apply for credit unless you need it. If you don’t, don’t do it. Getting a credit card at this point is not advisable.
It’s easy to generate expenses when you have a credit card and not easy to repay them. A good rule is to only apply for credit if needed and to keep your balances low.
Don’t close old accounts
If you close an old credit card account, it will look like you are losing control over your finances. Lenders may begin to suspect that you are unable to handle your debt and may give you a lower credit score because of it.
Leaving old accounts open helps your credit score by showing that you have always been in control of your charges responsibly.
So, staying away from those “we’re getting rid of this card if you don’t use it” emails and keeping that old Best Buy card around will help maintain your score while saving money from being charged interest on a debt you pay off frequently.
Be on time with your payments
Always make your payment on time because it’s the easiest way to boost your credit score. You may find yourself paying more interest on a loan with a bad credit score. As one of the most important aspects of a credit score, lenders like to see that you can be on time with your payments.
According to the Fair Isaac Corporation (FICO) what matters most is not if you are late on one or two bills, but how many times you have been late in the past.
Paying bills on time shows that you respect other people’s money. This is one characteristic of a person with a good credit score.
Maintain a low credit utilization rate
Maintaining a low credit utilization rate is one of the foundations for a good score. Your credit utilization rate is the amount of your available credit used as a percentage. If you carry a $1,000 balance on a $10,000 credit limit, then you are at 10% utilization.
In layman’s terms, it means you should not spend more than 30% of your available credit. This reduces your chances of borrowing more money if you show the world that you only use what you have.
Maintain best practices and be patient
A good credit score will take time to build. Several important factors go into calculating your score. Credit utilization, payment history, length of credit, and types of credit used all contribute to your FICO score.
But a good credit score is attainable if you practice smart spending habits and pay your debts on time each month. Having a good idea and plan of how to accomplish the goal of having an excellent credit rating can help you achieve it faster.
FAQs
What is a good credit score?
A good credit score allows a person to borrow money at reasonable interest rates and allows competitive eligibility for the best insurance rates. According to FICO and VantageScore, a credit score above 720 generally means your credit history is good to excellent.
This type of score makes it easier to qualify for some loans as well as credit cards with rewards programs. It also often results in lower interest rates on car loans and mortgages. Here are the five credit score ranges.
- Poor: 300 to 579
- Fair: 580 to 669
- Good: 670 to 739
- Very good: 740 to 799
- Exceptional: 800 to 850
On the most widely used scales, 850 is the highest credit score you can achieve.
How is your credit score determined?
A good credit score is based on a mathematical scale. This scale is the FICO score. A FICO score rates you on 5 different areas of your credit. Each area consists of a different percentage of total points for your overall score.
They are credit mix (10%), payment history (35%), amounts owed (30%), length of credit history (15%), new credit (10%). It is against these five areas that the lender will consider you for a loan or any kind of credit account.
How is a good credit score achieved?
A good credit score is achieved by developing good credit habits. Furthermore, a good credit score is achieved when a person pays all of his or her bills on time and has not taken out any new lines of credit (loans) that they can’t afford. Ultimately, your credit score relies on your “credit history”.
Is it ok to have debt if you have a good credit score?
Yes, having some debt can be beneficial to people who have a good credit score. It is important to make payments on time and keep as much credit open as possible so you’ll have access to extra funds when needed.
People with high credit scores usually have the flexibility to borrow money when needs arise. Don’t close extra credit lines unless necessary because that can hurt your score. That also goes for closing out bank accounts that are also associated with the credit line.
How long does it take to get a good credit score?
The amount of time it takes to get a good credit score depends on the specific situation; however, it will take at least 6 months and up to 2 years. This is because many factors go into an individual’s credit score, and a few things can affect it dramatically.
For example, just one late payment can hurt your credit significantly or a payment that was late last year could be in your past and not affect your score at all. The higher your credit score, the greater the chance that you will get approved for credit, so it makes sense to check your score yearly, if for no other reason.
Lastly, remember that no one is born with a good credit score, it takes time. Gather some information about your score first and then make an action plan.
Final thoughts
A good credit score is one of the most important tools for a successful financial life. However, being responsible with your money isn’t just about building an impressive credit score.
A good credit score will improve your ability to get a loan or buy a house and it reduces the amount of interest you pay. Here are 8 smart tips to make money with a good credit score. There are also tips to help you build your credit score which will ultimately make you money.
Everybody wants to make money somehow, right? You might be interested in learning about more investment opportunities if you have a good credit score. Check out my post on how to make money with real estate with proven tips.
Also, if you love automobiles, you can invest in them. Learn how to make money flipping cars.
Tosinajy is a blog that aims to enlighten both the old and young on the vast opportunity available to make money. The blog also provides various software and guides on how to go about it.
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