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Kerry Lutz
August 05, 2024
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Going From a 620 to a 720 Credit Score Will Change Your Life
Raising your credit score from 620 to 720 can have a profound impact on your financial health and overall quality of life. A credit score is a numerical representation of your creditworthiness, used by lenders to assess the risk of lending you money. Scores typically range from 300 to 850, with higher scores indicating better creditworthiness. A score of 620 is considered fair, while a score of 720 is considered good. The benefits of improving your credit score by 100 points can be substantial, affecting everything from loan approvals and interest rates to insurance premiums and employment opportunities.
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Lower Interest Rates
One of the most significant benefits of raising your credit score is the potential for lower interest rates on loans and credit cards. Lenders use your credit score to determine the interest rate they'll charge you. A higher credit score indicates to lenders that you're a responsible borrower who poses less risk, making them more likely to offer you lower rates. For example, the difference in interest rates between a person with a 620 score and someone with a 720 score can be as much as 1-2% on a mortgage loan. Over the life of a 30-year mortgage, this can result in savings of tens of thousands of dollars.
Improved Loan Approval Chances
With a credit score of 720, you're more likely to be approved for loans compared to having a score of 620. Lenders view higher credit scores as an indicator of lower risk, making them more inclined to approve your loan applications. This applies to various types of loans, including mortgages, auto loans, personal loans, and credit cards. Having a higher score not only increases your chances of approval but also gives you access to a wider range of loan products and more favorable terms.
Better Credit Card Offers
Credit card companies offer better terms and rewards to customers with higher credit scores. With a score of 720, you may qualify for credit cards with lower interest rates, higher credit limits, and more lucrative rewards programs, such as cash back, travel points, and other perks. These benefits can save you money and provide added value, whether you're using your credit card for everyday purchases or larger expenses.
Many insurance companies use credit scores as part of their risk assessment process. A higher credit score can lead to lower premiums on auto and homeowner's insurance. Insurers often view individuals with higher scores as more responsible and less likely to file claims. By raising your score from 620 to 720, you could save hundreds of dollars annually on insurance costs, further stretching your budget.
Increased Negotiation Power
A higher credit score gives you more leverage when negotiating terms for loans and credit. Lenders and creditors are often more willing to offer better terms to individuals with good credit scores. This could include negotiating a lower interest rate on an existing loan or credit card or securing a more favorable repayment schedule. Having a 720 credit score empowers you to negotiate from a position of strength, potentially leading to significant savings.
Better Housing Options
Whether you're looking to rent or buy, a higher credit score opens up more opportunities. Landlords often check credit scores as part of the tenant screening process. With a score of 720, you're more likely to be approved for a rental and may even qualify for lower security deposits. If you're buying a home, a higher credit score improves your chances of securing a mortgage with favorable terms, making homeownership more affordable.
Greater Financial Security
Improving your credit score also contributes to greater financial security. With a higher score, you have access to emergency credit if needed, at better rates. This can provide peace of mind, knowing that you have a safety net in case of unexpected expenses. Additionally, a good credit score can open doors to better employment opportunities, as some employers check credit as part of the hiring process, especially for positions that require financial responsibility.
Lower Utility and Cell Phone Deposits
Everyone cleans their clothes and dishes regularly but when was the last time you actually made sure that the appliance responsible for doing the cleaning was clean itself?
Sad Fact: Dirty appliances don't clean well. You wouldn't bathe in a dirty bathtub so why are you washing your things in dirty machines?
Join the over 1 million happy customers who use ACTIVE's viral cleaning tablets and stop worrying whether or not your appliances are actually cleaning like they're supposed to again!
Utility companies and cell phone providers may also consider your credit score when determining deposit amounts. A higher score can result in lower or even waived deposits, allowing you to allocate those funds elsewhere. This benefit is often overlooked but can add up to significant savings over time.
Easier Approval for Future Credit Needs
As you continue to maintain a higher credit score, you build a positive credit history that makes it easier to obtain credit in the future. Whether you're planning to finance a major purchase, invest in property, or start a business, a strong credit score provides the foundation for financial flexibility and growth.
Conclusion
Raising your credit score from 620 to 720 offers numerous benefits that can enhance your financial well-being. From lower interest rates and better loan approval chances to more favorable credit card offers and lower insurance premiums, the advantages are substantial. Additionally, a higher credit score can provide greater financial security, better housing options, and increased negotiation power. By taking steps to improve your credit score, you can unlock these benefits and enjoy a more stable and prosperous financial future.
Work with Fortress to Raise Your Credit Score
When you work with Fortress Credit, we will help you put together a detailed plan to successfully raise your credit in the least amount of time possible. Sometimes we work miracles and it happens almost overnight. Other times, it can take longer. Everyone’s situation is unique, which is why we create custom approaches that work for each individual client.