Everyone now knows that it is essential to have a good credit score. The credit score is your financial reputation when it comes to accessing different lines of credit and loans etc. Having a fair credit score will give you better access to favorable loans, credit cards, and other lines of credit with lesser interest. Here we will discuss some of the major benefits of having a good credit score.
Kavan Choksi apprises the benefits of a good credit score
Individual credit scores can touch many aspects of one’s life. Say, for example, credit may have a positive or negative impact on where you live, the amount of money you can borrow as a loan, how the employers may accept your applications, how mortgage providers may rate you, etc. Here are some benefits of maintaining a good credit score explained by Kavan Choksi.
1. Get lower car insurance rates
Some insurance companies may look at your credit score to custom devise your insurance premium and other costs. As per the CFPB, the insurance companies use credit reports before approving your application and how many charges can be levied. If you are a customer, they may check the credit score to decide whether to raise the premium or deny the renewal of the policy.
2. Lower interest loans
Banks and other lenders check the credit score of the applicants in order to decide their creditworthiness of the applicants. The loan application is approved based on the credit score of the applicants as well as the interest rate will differ for different credit scores.
3. Credit cards
While you apply for credit cards, they may check your credit score at the first point. In order to approve your application, a good credit score is necessary. You can also avail a lower interest rate credit based on your credit score. You can also enjoy benefits like lower APR (annual percentage rate) etc., on having a good credit score.
4. Higher credit limits
As you have seen above, a good credit score will also help you qualify for lower-interest loans and credit cards. It may also help you to enjoy a higher credit limit. A good credit score will also help you get large amounts of loans from banks and other financial institutions. If there is a good credit score, it may be testifying to the lenders that you have a lower credit risk, and they can confidently offer cash advance to you.
5. Better housing and mortgage
As we discussed, credit score can also impact where you live and the overall quality of life. A good credit score can help to get good housing options too. The landlords may check your credit score before renting their space out to you. Good credit can also help you get better mortgage rates for property and houses for a lowered interest.
So, having a good credit score has a multitude of advantages in terms of fundraising and improving the overall financial reputation of an individual. In another article in this series by Kavan Choksi, we have also discussed ways to improve your credit score.