Credit Score Articles

Use Your Credit Score to Negotiate Better Rates

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It’s a great feeling when you work hard to manage your credit responsibly and you pull your credit score to find it is significantly higher. A strong score puts you in the running for prime interest rates, loan terms and insurance premiums, so if your three-digit number has risen recently, now may be the time to contact your lenders and insurance provider to negotiate your accounts.

Refinance Your Mortgage

Generally, a mortgage is one of the most costly loans you take on in a lifetime, so refinancing may be a good option. For example, you may choose to extend the length of your loan to lower you payments, or shorten it if you plan to pay off your balance more quickly. Regardless of which type of refinance agreement you choose, your credit score will be weighed heavily into the lender’s decision. Your chance of getting approved for a better deal is more likely if that three-digit number is in top shape, so contact your lender and find out about the company’s score requirements.

Lower Your Insurance Premiums

In many states, insurers take your credit score into consideration when assigning rates. If your score has seen improvements since originally signing the contract, there’s no harm in calling the company and asking them to review your current policy with a new credit check. Also, consider getting quotes from other insurance agencies to potentially use as a bargaining chip with your current provider. If the company will not agree to lower premiums, maybe switching truly is the better option.

Keep in mind that with auto insurance your driving history will also be a factor, so if you have multiple citations you may not receive the most advantageous rates even if with a high credit score.

Credit Card APRs

Many people are unaware you can negotiate your current annual percentage rates (APR) on credit cards, but this strategy can help you save money on interest. Your credit card issuers may be willing to negotiate your current rate if you notify them that your credit score has improved. Lenders do not want to lose your business, so use this to your advantage when negotiating lower rates.

You work hard to maintain a healthy score, so don’t be shy about using it to your benefit. Your credit score is often a major deciding factor of the terms and conditions of your credit agreements, so it only makes sense to inform creditors when it has improved.