💰 What Does Having a Good Credit Score Actually Get You?

Hey, Wicked Club fam!

We made it fam, it’s Friday!!! If you had a hectic week, I hear you. It was a rough week for me as well 🫠 However, let’s start with some exciting news! Your girl just secured a spot at Buildspace’s nights&weekends s5. It’s an awesome program where a bunch of different types of creatives come together to work on an idea or project for 6 weeks. My goal for the program is to kickstart my content creation journey for my brand new creator account @poojabuilds, posting regularly, and building brand awareness for @wickedpay as I share my startup founder story. There’s no content quite yet, but would appreciate any early support 🫶 

🗒️ This week’s rundown:

• Topic of the week: What Does Having a Good Credit Score Actually Get You?

• Citi Double Cash Card: Solid Rewards for Everyday Spending

💰 What Does Having a Good Credit Score Actually Get You?

A question I often hear is, “What's the real benefit of having good credit?” It's understandable why young adults might not see the immediate value. Many are still in college, some living with their parents, where most things are taken care of. However, the real challenges of adulthood start when you graduate and take on more significant responsibilities, like moving out, getting your first apartment, buying a car, or managing increased expenses. This is where good credit becomes crucial. Once you're out of college, with a new job, and looking to make big purchases, having good credit is key. The savings you can enjoy with good credit should not be underestimated.

Let’s talk about some benefits of a good credit score:

🏠 Better Mortgage Rate

Your credit score plays a crucial role in determining your mortgage rate. Mortgage lenders use this score, which ranges from 300 (the lowest) to 850 (the highest), to assess your creditworthiness.

A higher credit score boosts a lender’s confidence that you’ll make payments on time. This can help you qualify for lower mortgage interest rates and fees. In some cases, lenders may even reduce their down payment requirements for borrowers with high credit scores.

Real-Life Example: 30-Year Fixed-Rate Mortgage for $300,000

Let’s say, for example, you plan to get a 30-year fixed-rate mortgage for $300,000. Here’s what your loan could look like if you had a credit rating in the 760 to 850 range, compared with one in the 620 to 639 range (and other lower ranges). Not only would your monthly payment be lower, but you could save $115,570 on interest over the life of the loan.

If you’d like to check out the above loan savings calculator on your own, here’s the link.

This also applies to auto loans. If you’re trying to buy a vehicle, the auto loan rates work in a similar way. With a good credit score, you’ll get better rates on auto loans and insurance if applicable.

🏠 Renting Apartment Becomes Easier

One of the important things landlords rely on when choosing tenants is credit scores. A good or excellent credit score can instill confidence in landlords, making them more inclined to approve your rental application, especially when combined with positive background signals.

Not all landlords ask for credit history but for landlords who do review credit histories, higher scores are typically favored. According to FICO®, a score above 670 is considered positive, while lower scores may prompt landlords to scrutinize your credit details more closely.

Maintaining a solid credit score not only increases your chances of securing your desired apartment but also helps avoid the challenges associated with renting with poor credit, such as requiring a co-signer or roommate. This is particularly advantageous in competitive rental markets like NYC, where a good credit score can give you a significant advantage.

Having poor credit may necessitate finding a co-signer or demonstrating a high income. In any case, landlords are more likely to approve tenants with strong credit histories, making it essential to manage your credit responsibly.

💳️ Lower Interest Rates on Loans and Credit Cards

One of the most significant advantages of a good credit score is access to lower interest rates on personal and other loans and credit cards. Lenders view you as a lower-risk borrower, which means they’re willing to offer you more favorable terms. This can save you thousands of dollars over the life of a loan.

📈 Higher Credit Limits

Credit card companies are more likely to offer higher credit limits to those with good credit scores. A higher limit can improve your credit utilization ratio (the amount of credit you’re using compared to your total available credit), which in turn can further boost your credit score. It also provides more financial flexibility in case of emergencies.

🎁 Access to Premium Credit Card Offers

Credit card companies offer their best rewards and perks to customers with excellent credit scores. These can include travel rewards, cash back, sign-up bonuses, and other benefits. Having a good credit score can qualify you for these premium offers, enhancing your overall financial experience.

Conclusion

Maintaining a good credit score requires diligence and responsible financial behavior, but the rewards are well worth the effort. From lower interest rates and better loan approval chances to enhanced negotiating power and improved employment opportunities, a strong credit score can significantly enhance your financial well-being and open up a world of opportunities. So, take the necessary steps to build and maintain your credit—it’s an investment in your future.

💸 Citi Double Cash Card: Solid Rewards for Everyday Spending

The Citi Double Cash Card stands out as a reliable option for those seeking a no-frills cash-back card with the potential to build credit. Here's a breakdown of its key features:

🔢 Rates, Fees, and Offers

💰️ Double Cash Back Advantage:

This card lives up to its name by earning you 1% cash back when you make a purchase and an additional 1% cash back when you pay off your balance in full. This effectively gives you 2% cash back on all your spending, making it a great choice for everyday purchases.

😇 Simple Rewards Redemption:

Your earned cash back is accumulated as ThankYou® Points, which can be redeemed for a variety of options:

• Statement credit: Reduce your credit card balance with ease.

• Direct deposit: Get your cash back deposited directly into your bank account.

• Check: Receive a physical check for your rewards.

• Gift cards: Treat yourself or others with gift cards from popular retailers.

• Travel: Book flights, hotels, and other travel experiences with your points.

⚡️ Wicked Tips for Citi Double Cash Card

1. Earn Rewards Efficiently:

   • Earn 1 point per $1 spent and 1 point per $1 paid off.

   • Points are worth 1 cent each when redeemed for cash back.

2. Pay Off Your Balance:

   • Pay your balance in full each month to earn the second half of the rewards.

   • This also helps you avoid interest charges.

3. Redeem Cash Back:

   • Redeem cash back as a statement credit or direct deposit.

   • Note: Using cash back as a statement credit won't earn the second 1%.

4. Simplify Your Spending:

   • Use the Citi Double Cash® Card for all purchases without worrying about bonus categories.

   • Ideal for those who prefer a straightforward approach to earning rewards.

5. Understand Citi ThankYou Points:

   • Be aware that the Citi ThankYou rewards program can be complex.

   • Transfer ratios to travel partners like JetBlue or Wyndham are less favorable (1,000 ThankYou points = 800 points).

6. Combine with Other Cards:

   • Use a card with bonus categories for specific purchases to maximize rewards.

   • Use the Citi Double Cash® Card for everything else for consistent earnings.

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