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In 2023, the average U.S. credit score was 715, according to Experian, one of the three credit reporting bureaus. For context, a 715 is considered a good score, but it's not particularly high.
Credit scores range from 300 to 850 under the FICO model, which is the one most commonly used. FICO® Scores of 740 to 799 are considered very good, while scores of 800 or more are considered exceptional. So if you have a score that's at least 740, you can consider yourself someone with a high credit score.
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You may be aware that having a high credit score could make it easier to qualify for new loans or credit cards . And great credit might also make it so you're paying less money to borrow. For example, you might snag a lower interest rate on a mortgage with a credit score of 780 compared to someone with a 710.
But there are also some less-obvious perks that come with having a high credit score. Here are some you may not be taking advantage of -- but should.
1. You may have an easier time renting a home -- and edge out the competition
It's common for landlords to run credit checks on applicants to see if they're likely to pay their rent on time based on borrowing history. So let's say you find an apartment in a great neighborhood at a reasonable price. Your strong credit might make it so a landlord has no hesitation about letting you sign a lease.
But what if you're not the only tenant applying for that awesome apartment? If your credit score is higher than those of your fellow applicants, you might get to sign that lease instead of them.
2. You can avoid paying deposits for utility service
It's a pretty common practice for utility companies to require customers to put down a deposit when they sign up for service. But with strong credit, that may not be necessary.
A high credit score sends the message that you have a strong history of paying your bills when you were supposed to. In light of that, utility companies you sign up with may waive your deposit. That's money you get to keep for other more exciting expenses.
3. You might save money on life insurance
It makes sense that credit card or loan issuers would want borrowers to have high credit scores. After all, issuers are taking a risk by lending out money or extending a line of credit.
Life insurance is very different. With life insurance, you're not borrowing money. Rather, you're paying money to put a policy in place that's designed to protect your loved ones in the event something happens to you.
Still, life insurers sometimes offer more favorable rates to applicants with great credit. The logic may be that if you don't take too many financial risks, you may not take too many other risks, either. (Whether this logic actually makes sense is a different story, but hey, you might as well have it work to your benefit.)
Do your best to get your credit score into great shape
Clearly, there's much to be gained by having a high credit score. So if yours isn't quite there, you can improve it by:
- Paying all debts and bills on time
- Paying off credit card balances you currently have
- Getting a credit limit increase -- but this only works if you keep your spending at current levels
- Checking your credit report regularly and correcting errors if they arise
If your credit score is already in solid shape, continue paying those bills on time, keeping credit card balances low, and reviewing your credit report every few months. That way, you can continue enjoying perks like the ones above.
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