Take care of your credit because it can have a big impact on your financial life.
You’ve probably heard this advice before — perhaps many times. Yet you might not really get excited about the idea of earning good credit until you grasp how much a solid credit rating could transform your life.
Over the years, I’ve been fortunate to earn and keep an excellent credit score. And I’ve used my excellent credit many times to my advantage. From opening premium rewards credit cards and earning free vacations to qualifying for four low-rate mortgage loans, my excellent credit has saved me tens of thousands of dollars.
But you don’t have to take my word for it.
I reached out to financial professionals across the country and asked them to share their best credit-related wins. Here’s a look at 9 ways that 9 financial pros used good credit scores to get ahead.
Maybe their stories will inspire you to put your good credit to work for your own benefit.
Saving Money on a Car Loan
Marcus Garrett, best-selling author of Debt Free or Die Trying and host of the popular podcast, The Marcus Garrett Show, shares how an excellent credit score has helped him pay less on his auto loan more than once.
“Having excellent credit (750-800), saved me money on a car purchase, twice! First, when I went to purchase a car in 2015, the dealer tried to offer me a ridiculously high interest rate,” says Garrett.
The auto dealer tried to pull a fast one, and claimed the interest rate he was offering was the “best deal ever.” Thankfully, Garrett was smart enough to see through those shady practices and do his own research.
“Instead [of agreeing to the auto loan the dealer offered], I financed with my local credit union and saved myself an additional $2,000 in interest before I ever left the lot,” he says.
“I paid this vehicle off early and drove it for 5 years until I ran into mechanical issues (in the middle of the pandemic). Thanks to chip shortages, my vehicle was in high-demand and I was able to sell it at over market blue book value.”
After selling his vehicle, Garrett went on to leverage his good credit once again. He used the cash from the sale of his car plus a low interest rate to negotiate another great deal on a certified used vehicle.
“I still plan to pay my auto loan off early again,” Garrett says, “but I was able to negotiate a rate of 2.99% APR when I was originally offered rates of 3.15% and higher.
Maintaining good credit and being informed gave me options in both circumstances. Otherwise, I may have been at the mercy of lenders!”
How Much Could You Save?
Wondering how much of a difference a low interest rate could make on an auto loan? You might be surprised.
Here’s a hypothetical look at how much money an excellent credit score might be able to save you on a 48-month, $25,000 car loan.
(Good to Exceptional)
(Fair to Good)
(Poor to Fair)
Having a FICO® Score that’s 720 or higher can help you keep a lot of money in your pocket when you finance a vehicle. In the scenario above, you could save as much as:
- $147 each month.
- $7,077 in total interest.
On larger loans or those with lengthier repayment terms, the potential savings could be even more significant.
Opening the Door to Real Estate Investment
Active-duty Marine, David Pere, was in a tough financial spot. In 2015, the founder of The Military Millionaire Community, had a negative net worth. But thanks to some basic lessons his parents taught him, he had one important thing going for him — a good credit rating.
“[My good credit] allowed me to qualify for an FHA loan to purchase a duplex,” Pere says.
He lived in one side of the multi-family home while renting the other for enough money to cover his full mortgage.
“Fast forward 5+ years,” he says, “and I own a hotel, 3 apartments, and a myriad of other rental properties. Due to my credit I’ve been able to qualify for every loan I applied for, including a home equity line of credit (HELOC); which has allowed me to buy additional real estate over the years.”
Credit is often overlooked at a young age, but in Pere’s experience it’s almost a complete show stopper in the real estate world.
“With good credit,” he says, “almost anything is possible when it comes to mortgages, lines of credit, business financing, etc.”
When you apply for a mortgage, the lender will check all three of your credit reports (Equifax, TransUnion, and Experian) and your FICO® Scores based on those reports. Check out this CreditWriter guide and learn 5 steps to prepare your credit for a mortgage.
Getting an MBA
Genevieve Anderson, Founder and Finance Coach at Holistic Personal Finance, has used her 800+ credit score to accomplish many goals throughout her lifetime. On top of getting the best credit cards and buying her first home with 0% down, she’s leveraged her good credit for various investment opportunities, and to pay for graduate school.
“I used my great credit score to help me pay for my MBA,” Anderson says. “I financed it on a 0% credit card, while I waited for my employer to pay me back.”
By using a credit card to pay for grad school, Anderson also earned 1.5% cash back on her purchases. Over three years, she made an extra $360 in cash back, all while paying $0 in interest fees with her employer’s reimbursement.
Earning her Master’s of Business Administration degree has paid off for Anderson. It helped her land a better position at a new company, earning an extra $15,000 per year in the process.
On top of the salary bump, Anderson also nets:
- $600 per month on a rental home.
- $700 per year from peer-to-peer lending (financed by a line of credit).
- $200 per year savings on her insurance premiums.
All of these smart money moves are made possibly by her excellent credit score.
“I’ve spent years working in financial services,” she says, “and now I use that knowledge along with my personal experiences to help women become confident with money as a finance coach.”
Paying Off the IRS
Owing money to the Internal Revenue Service can be a stressful experience. And when you add on expensive penalties and interest, it can be even tougher to fix the problem.
In 2015, personal finance expert Ashley Patrick, CEO and founder of Budgets Made Easy and The Money Mindset Podcast, was in a financial mess. While Patrick was pregnant, she and her husband used a $20,000 401(k) loan for a much-needed home renovation to make room for their second child.
There was just one problem.
Around three months after the renovation and the birth of their new baby, Patrick’s husband lost his job. With the loss of income, paying back the 401(k) loan was no longer possible. And so, the $20k counted as an early withdrawal.
Patrick and her husband owed the IRS $6,000. The bigger issue? They didn’t have the money to pay.
Thankfully, Patrick came up with a plan to make paying off the IRS easier and more affordable. The plan hinged on good credit scores, and leveraging them to her family’s advantage.
“Because of our good credit, I was able to get a 0% interest credit card. I put what we owed to the IRS on it instead of paying tons in interest and penalties to the government,” says Patrick.
Looking back, Patrick describes the experience as a “blessing in disguise.” It put her family on the path to paying off their debt. In the end, Patrick and her husband knocked out a sizable $45,000 in debt in just 17 months.
Visiting Family and Traveling for (Practically) Free
Having good credit doesn’t just make it possible to finance big purchases and secure low interest rates. Sometimes the perks of good credit are a little more fun in nature. That’s the case with our next financial professional, Ruby Escalona.
Escalona is a Jacksonville, Florida-based accountant and co-founder of the blog A Journey We Love. As a former new immigrant to the United States, there was a time in her life when she didn’t enjoy the benefits of good credit that she does today.
“Back when I was new to the U.S. as an immigrant, I had zero credit. But I was lucky where my boyfriend had excellent credit that he wasn’t utilizing,” Escalona says.
She and her now-husband applied for a few premium rewards credit cards in his name. He was only using a debit card for purchases up until that point.
Escalona’s husband added her as an authorized user to his new credit cards, and that helped Escalona build her own credit. Plus, the credit card rewards they earned helped her fly back home to the Philippines to visit family the following year.
“Within a year,” she says, “I too had excellent credit. That also increased the number of premium cards we have and gave us opportunities to go to Europe to visit my now husband’s family [in Slovakia] and other trips within the U.S. and the Caribbean.”
It can take six months from the time you open your first credit tradeline to qualify for a FICO® Score. Here are some CreditWriter tips that can help you build a credit score from scratch.
Making Another Spin on Real Estate Investment Possible
Rachel Hernandez, real estate investor, author, and founder of Adventures in Mobile Homes, started out her real estate investment career with single-family homes. Before long, however, she discovered an alternative investment strategy that was a lot more fun — mobile home investing.
Hernandez uses her good credit scores to her advantage as a real estate investor. But traditional bank loans aren’t the only way she gets the job done.
“I once purchased 3 mobile homes (under $10,000 each) using a credit card with 0% interest for 6 months,” says Hernandez. “At the time, I was waiting for a few of my single-family homes to sell in another state. So, I didn’t have the cash right then and there to purchase these homes.”
Hernandez used a credit card advance to make these purchases happen. But she took advantage of a promotion so she didn’t have to pay the steep fees that normally go hand in hand with credit card cash advances.
She sold her my single-family homes before the promotional interest rate expired on her credit card account. And she used proceeds from the sale to pay back the credit card in full.
The risk paid off, and wound up being a profitable investment opportunity, Hernandez says.
“After fixing up the homes myself and finding tenants for them, the income from the three mobile homes totaled to around $1500 per month in cash flow.”
Moving to a Better Place
Another benefit of having good credit is the ability to move out of a bad living situation and move on to some place better. Joel Parker, Financial Freedom Partner with Hustle to Financial Freedom, shares how a solid credit rating was the key ingredient in a successful relocation plan for his family.
“My wife and I were living in Massachusetts in a roach infested apartment and we were sharing a car,” Parker says. “Unfortunately, my job required local travel most days. Therefore, on those days my wife was forced to walk 2 miles each way to and from work. Our lives were anything but glamorous.”
After a while, the couple was at the end of their rope. That’s when Parker’s wife suggested they move back to Florida. Florida had two important things going for it — a community of friends for support and the potential to find better jobs.
But there was a snag in the plan. Parker and his wife needed over $3,000 in deposits plus the first month’s rent for the new apartment where they planned to live. Newly jobless, their options were limited.
The couple needed to stretch their emergency fund and give themselves some wiggle room to find new jobs. So, Parker decided to use his good credit to open several credit cards with 0% interest promotions.
“The plan worked!” says Parker. “We used the cards to cover all other moving expenses. But we paid off all the cards interest free, and we were able to build a great life in Florida.”
Applying for too much credit in a short period of time could hurt your credit score. But the credit score impact of hard credit inquiries is often overhyped. You don’t have to be afraid to leverage your good credit when you need it, as long as you don’t apply for new financing in excess.
Getting Out of Debt
You might not think of using credit to help pay off your credit obligations faster. But that’s exactly what Shanté Nicole did, and she managed to earn an even better credit score in the process.
After a long battle with stage 3 cancer at the age of 22, Nicole was in a bad financial spot. Thankfully, she beat cancer, but she was left with a pile of medical debt, collection accounts, and high credit card balances in the aftermath.
Nicole struggled for years with bad credit after her experience. In 2015, she was finally ready to tackle her five-figure credit card debt. And she accomplished her goal with the use of balance transfer credit cards.
Her credit wasn’t perfect at this point, but it was good. She and her husband opened a total of six credit cards with 0% APR introductory balance transfer offers. As they opened the cards, they would transfer high-interest credit card debt away from Nicole’s existing accounts.
Little by little, over a five-year period, Nicole chipped away at her credit card debt. As her credit card utilization began to come down, her credit scores and her husband’s scores came back up. Qualifying for those balance transfer credit cards (and using them wisely) was Nicole’s ticket to a happier, credit card debt-free life.
“After I recovered from my trials and tribulations, I launched my business,” says Nicole.
Today, Shanté Nicole is the CEO and founder of Financial Common Cents, a nonprofit that helps children and adults develop savings and debt management strategies, budgeting, and more.
“I’ve helped thousands achieve their credit and financial goals, as well as myself. I’ve purchased a home, paid off over $50,000 in debt, got the lowest interest rate offered on my auto loan, and paid off two student loans,” says Nicole.
“I am forever grateful for what I’ve gone through, because it opened the door for me to help so many others.”
Negotiating with Debt Collectors
No one likes to hear from debt collectors. But you don’t have to be intimidated when collection agencies call or send you letters.
As a consumer, you still have a lot of rights in these situations. The Fair Debt Collection Practices Act (FDCPA) protects you from unfair and abusive practices, and so do a number of other consumer protection laws.
When your financial situation improves, you can often settle out your debts for less than you owe. This CreditWriter guide will give you 5 expert tips on how to negotiate with debt collectors.
Refinancing to a Lower Interest Rate
Perhaps one of the best ways to take advantage of a good credit score is to secure a low interest rate when you borrow money. However, if you don’t snag the best interest rate at first, that doesn’t mean you have to be stuck paying a higher APR forever.
Lorena Muñoz-Holliday, bilingual financial counselor and host of the podcast De Peso a Peso, wanted to lower the interest rate on her home loan. Thanks to her good credit score, she was able to accomplish that goal.
Muñoz-Holliday successfully refinanced her mortgage, walking away with a better interest rate and lower monthly payment. And she didn’t stop there. She went on to take out a business loan for a rental property as well.
“My most recent win,” says Muñoz-Holladay, “was to be able to obtain the best credit card with travel rewards.”
She looks forward to earning valuable rewards on her everyday spending — rewards she would miss out on if she was paying with cash or a debit card.
Using credit card rewards can be a great way to travel without putting a strain on your budget. And if you’re careful to pay off your full statement balance each month, you can earn those rewards without paying a single penny (or a peso) in interest fees.
Michelle Lambright Black is a leading credit expert, writer, speaker, and credit expert witness with nearly two decades of experience in the credit industry. She is an expert in credit reporting, credit scoring, financing (mortgages, credit cards, loans), debt eradication, budgeting, saving, and identity theft. She’s featured in print monthly with brands such as FICO, Forbes, Reader’s Digest, LendingTree, Experian, and more. Connect with Michelle on Twitter (@MichelleLBlack) and Instagram (@CreditWriter).
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