Case study: How to leverage your very good credit score

Nice work! You’re currently sitting on a very good credit score. Generally speaking, this means that if you have the serviceability to pay back a loan, your credit score usually won’t be what holds you back from being approved.

But did you know that there are perks that come with a high credit score, and you may be able to take advantage of these to get better deals?

Understanding the credit score ranges

Your credit score isn’t a static number. It changes over time depending on the information that is contained in your credit report.

There are five credit score bands that your score can fall into.

  • Excellent: 800-1,000
  • Very good: 700-799
  • Good: 625-699
  • Fair: 550-624
  • Below Average: 0-549

A very good score means you are unlikely to have an adverse event in the next 12 months.

A real life example of someone with a very good score

Brad is an accountant who lives in Melbourne. He is in his early 20s and has taken out a loan for a car in the past and currently has a credit card with a manageable limit on it.

He was diligent in paying off his car loan and had set up a direct debit each fortnight after he was paid to ensure his loan repayment was never missed. That car loan has now been paid off in full.

He made the decision to get a credit card so that he could make the most of rewards points. Even though it was possible for him to be approved for a higher credit limit, he stuck with one that he felt was manageable for his circumstances. 

He pays off the credit card balance in full each month and enjoys the perks that come with a rewards card as a way to enjoy free travel each year.

Now he is saving up a deposit for a home. He hopes to use his very good credit score to his advantage when negotiating an interest rate from the many lenders that will be available to him as a result of his great credit score.

Factors that may be impacting your very good score

In the case study above, Brad’s effort to avoid any missed payments or defaults on his credit accounts has helped him earn his very good score. 

But just because he has a very good score now doesn’t mean he can be complacent. He should be aware of what factors can cause his score to increase or decrease over time.

These factors can increase your credit score: 

  • A good history of making payments on time
  • Paying off outstanding loans
  • Paying a default
  • Bringing accounts up to date
  • Negative data expiring and being removed from your report.

These factors can cause your credit score to decline:

  • A mistake has been made on your credit file which you will need to have fixed. Errors could range from a simple mistake such as a duplicate entry or incorrect details, or it could mean something more serious like your identity being stolen

  • Defaulting on a credit account
  • Submitting multiple credit applications in a short period of time
  • Having excessive open credit accounts
  • Having too much unsecured credit
  • Not paying a bill and having it go to a debt collection agency
  • Having a combined credit limit that is viewed as being too high
  • Being declared bankrupt.

How to leverage your very good credit score for extra perks

In Brad’s case study, he knows that his very good credit score gives him some negotiating power with lenders, as he is an attractive option for them.

This doesn’t just apply to home and car loans. It can work for credit cards too.

If you have a very good credit score it’s worth picking up the phone and trying to negotiate the standard terms on a credit card. This could be a reduced interest rate, lower fees or better rewards point options.

Alternatively, Credit Card Compare is often able to access special offers from credit card providers that are targeted towards those who meet an income eligibility criterion and have a very good or excellent credit score.

Your great credit score allows you access to a wider range of lenders and you will often qualify for a higher credit limit.

You can also negotiate a better deal on your utilities and phone contracts as they also use your credit score before approving a contract with you.

If you’re looking for a personal loan you might consider a peer-to-peer loan. This is a newer type of lending where your interest rate is based on your credit score. 

The higher your score, the lower your interest rate will be, which could make it an alternative way to access an affordable unsecured personal loan.

Even if you have a great credit score it is beneficial to track it, to make sure no errors appear on your report. And that it includes information you would expect to see there. 

With our free credit score tool, we can notify you each time your score changes.