The Advantages of Having an Excellent Credit Score

Credit scoring systems are a product of the late 1950s, based upon the model of the Fair Isaac Company's FICO score. Such scores are designed to evaluate a person's history of managing credit, and are referenced by lending companies for the purpose of minimizing credit risk. People who are deemed to be excellent credit risks enjoy numerous benefits, particularly low interest rates on substantial loans.

Credit Accessibility

Doors swing open for consumers who consistently demonstrate that they are capable of managing credit responsibly, whereas they shut in the faces of people who pose undue credit risk. For people who have yet to establish credit, lack of accessibility to credit hampers their ability to leverage financial opportunities. Likewise, people who have proven incapable of managing credit responsibly are usually denied whenever they submit an application for a line of credit. People who pose little credit risk, however, are able to access new lines of credit with relative ease. In fact, they are usually showered with incentives just for opening new credit accounts.

Competitive Rates

Low interest rates on home loans, car loans, personal loans and even credit cards are less difficult to secure by consumers who enjoy excellent credit scores. Attractive credit offers are typically qualified with extensive fine print, emphasizing that competitive rates are contingent upon a lender's stamp of approval. In most cases, people with high scores are approved for these advertised offers, and can afford to buy better quality cars or larger homes. By contrast, people with low scores receive less appealing offers in place of those advertised, and are forced to pay higher interest rates and receive smaller loan offers to purchase homes and autos.

Convenience

Most lenders are eager to loan money to a person whose FICO score is unreproachable -- 760 and above. Consequently, these individuals encounter fewer challenges than those with lower scores when they seek to borrow money from financial institutions. Such is not the case for people with low credit scores, as they are usually required by lenders to wade through higher volumes of paperwork to borrow money. Utility companies also customarily require them to pay deposit fees before being granted service, and insurance companies reason that people who fail to pay their bills on time are more likely than those who do to file claims. So, people with high credit scores benefit by not having to pay high insurance premiums on the basis of their stable financial conduct.

Job Market

An unblemished FICO score permits a job applicant to stand apart from a crowd of competitors in the eyes of a prospective employer. A person's ability to handle money often influences the scope of his employment opportunities. Since employers seek reliable employees, many employers run credit checks on prospective workers during the early stages of the hiring process. A poor credit score may prevent a person from receiving employment at state or local agencies, and may hinder a person's access to supervisory positions.