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The Importance of a Good Credit Rating

Enjoy Better Interest Rates

Enjoy Better Interest Rates

We have a lot of reasons to be thankful for lenders. They make it easy to handle our finances. They will lend the financial assistance that we need. Nonetheless, it is important to keep in mind that they do not always bring good news. In some instances, they bring bad news. In order to assess the borrowers and to have the assurance that the money borrowed will be repaid, they take a look at different things, and one of them would be your credit rating. Whether you like it or not, such rating is going to define your attractiveness as a borrower. If you have not paid previous balances from your credit card, if your bill payments are not settled on time, and if you owe money from your previous loans, your rating can be unfavourable on your end.

Be Approved for an Auto or Home Loan

For many people, they resort in loan application to have the home and the car that they need. They rely on the help that can be extended by lenders to finance the properties they would like to purchase. In this case, your credit score will also play a vital role. If your rating is unfavourable, lenders will see you as a high-risk borrower. This means that there is a tendency that you will not be able to repay your loan, and hence, giving them a reason to reject your loan application.

Enjoy Better Interest Rates

Aside from just being critical towards being approved in your loan application, your credit rating will also have an impact on the interest rate of your loan. Generally speaking, if your score is high, this would mean that you are seen as less of a risk, and hence, interest rates will be lower. This is as against low credit score where you can expect interest rates to be higher than normal.

Find a Place to Live

If you do not want to buy a new home and you would like to settle with renting a property instead, your credit rating will also have a major role to play. Many of the landlords nowadays will also look at your credit report and use your rating as part of the process for rental application. A bad score would mean that they could encounter problems in settling rental payments.

Be More Attractive for Employers

Although it is not necessary for employers to take a look at your credit rating, it cannot be denied that there are still many who use such as a tool for the assessment of their applicants. If you have a favourable score, it means that you have not been a problem with any lender in the past and this says a lot about the kind of person you are. More so, a poor credit score can be seen by many as lack of financial management skills and being irresponsible.

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