Why is a credit score important?

Why is a credit score important? Your credit score can help you achieve a lot of things that could be hard for you otherwise.

The following is a list of things you can achieve with your credit score.

• Have a lower rate on your mortgage. Having a good credit score will give you a better rate on your mortgage. Your debtors will be willing to give you the best rate possible when they are convinced that you will pay them back on time.

• Have a reduced interest rate on your car loan. The car loan interest rate can be higher or lower depending on your score. If you use your money wisely and pay all your debts on time; car loan providers will trust you with their money. Your credit account activities and behaviors will be reflected by your credit score. From the table below, you can see that the interest on the car loan can reach up to 19.02% based on the car you are buying.

• Your telephone and communication company can give you a discount or waive your deposit fee.

• It will be easy to get approved for an apartment with a good credit score. Many apartments attract good tenants by waving deposits if their credit scores are good.

• It is easy to get more credit cards when your credit score is good. There are times when you will need to have an extra credit card. To get approved for a new card, you will need to prove that you acted responsibly while using the cards you previously had. That means, you did not overuse your credit limit, you paid on time, etc. Your credit score will be used to evaluate all these elements.

More benefits of credit score…..

• People will want to partner with you because they think you are a master of your finances. If you want to partner with some people on a business, they may look at your score. It is possible that they will want to know how you handle money and debts. If you don’t do a good job, they could avoid getting in business with you or give you a position that has nothing to do with money.
• It can help you get a job. Some employers could use your score as a way to evaluate how you handle money. For example, if you are applying for a money management job; the employer can judge how you handle money based on your score.

• It is easy to increase your credit limit. Your credit limit is the amount of money your bank or credit provider allows you to use on a credit card. A good score will prove that you use your credit cards wisely. This will increase your chances of having more credit limits.

• You can easily refinance your home. Like any other loaning process, your lenders will need assurance that you will pay them back. Since your financial activities are reflected by your score; it will come in handy when you are trying to refinance your home.

• You will have a better-negotiating power. It is true that a good score can give you an upper hand when negotiating deals. It has to be good enough to increase the optimistic sentiment of the other side about you.