Not all consumers realize that your credit score is a compilation of three different scores from the major credit reporting agencies Equifax, Experian and the TransUnion. This combined FICO score helps organizations determine your risk for becoming seriously delinquent - or not paying - your debt over the next 24 months. Here are some of the benefits you'll reap from excellent credit:
- Reduced insurance rates.
- Lower cost of capital for personal loans.
- Improved interest rate offers from credit card companies.
- Utility companies such as gas, water, and electricity may waive connection fees or deposits.
- Waived deposits on rental units such as boats, RVs, and apartments.
- Free or reduced-rate mobile devices.
Why do you receive all these benefits by improving your credit rating? The best credit repair companies can help you understand how this works: when you lower the risk that you're going to default on payments, organizations are more willing to accept you with the understanding that you'll be a long-term (and profitable!) customer.
Companies don't benefit when they must repossess your expensive new iPhone or Corvette--they benefit when you continue to pay your bills fully and on time. They're willing to provide you with a smaller benefit upfront (reduced or no deposit) when they have a high comfort level that you'll continue paying your bills (good credit rating). The optimum way to repair your credit is by working with a trusted agency and continuing to pay your bills on time.
Why it Pays to Repair Your Credit
I get it. You're thinking "Why should I go to the time, effort and energy of repairing my credit? Who really cares about this seemingly arbitrary number?". Unfortunately, the answer to that question is "Nearly everyone". Your credit rating follows you throughout life and impacts important questions such as:
- If you can get approved for a primary or secondary mortgage.
- Interest rates on major purchases such as homes, boats, and vehicles.
- If you get that important promotion at work.
- The interest rate that credit card companies charge you for funds.
- How high your car insurance premiums are.