4 Benefits of a Good Credit Score?

You might have heard about a good credit score, but do you know its importance? Read on to find out what financial benefits you can achieve with a good credit score.

Many people know about credit score, but they may not be aware of how a good score can simplify their financial life! The better your score, the cheaper it is to borrow money from lenders. A strong score of 750 or more can give you access to lower interest rates on credit cards. In short, most of your financial goals such as buying your dream car and house, where you might require a loan, need a good score.

1.       Quick Approval of a Loan and Credit Cards

Most lenders rely on your credit score to determine whether to approve your new credit card or loan application. When you have a poor score, typically below 500, lenders consider you to be a risky borrower; hence, the chances of your application getting rejected are higher. A good score ensures a better chance of your application for a loan or a credit card being approved. In other words, you can confidently apply for a loan or a new credit card.

2.       Lower Interest Rates on Loans

With a good credit score, you may qualify for best interest rates on a loan. For example, for a home loan, a bank charges an interest rate of 10.50% p.a. to a person with a score of 750 or more and 12% for someone who falls in the credit range 650-750. So, the person with a better score benefits with 1.5% during the entire term of the loan. The less money you pay on interest, the faster you will pay off your debts. This way, you create no harm to your credit history as well as you can easily manage other expenses. Conversely, a person with a poor score can have a negative impression on lenders. They might consider you as an irresponsible borrower. Even if they approve your loan application, you might have to pay a higher interest rate on loan.

●        Negotiating power

When you have a good credit score, you have the leverage to negotiate the terms of your loan. You can also negotiate a lower interest rate on your credit card. Additionally, you can bargain on the other attractive offers you might have received from other companies. This is how you get rewarded for working hard at maintaining a good credit history! In case you have a low score, you may not have the negotiating power on a loan or a credit card. In fact, the options available for you might be limited. 

Related Read: A Quick Infographic on how to Become A CRIF Credit Score High Achiever.

●        Better Credit Card Options and Higher Credit Limit

Finally, with a good credit score, lenders consider you creditworthy. They may lend you more money, as they are confident you may pay back all the money on time. Based on your score and debt to income ratio, you can apply for a higher credit limit on your current credit line, viz- credit card/loan or on a new account.

Not only you have a better chance of higher credit limit, but you have an option to avail some of the best credit cards in the market. You can easily opt for credit cards offering you some of the best features like higher rewards rates, valuable sign-up bonuses, concierge resources, etc.

With these great benefits, a good credit score is highly desirable. If you have a poor score, you can work towards improving it. Check all the best ways to improve your credit score with CRIF.  CRIF is one of the RBI regulated credit bureau in India that gives you credit report and score in the most accurate form. Make sure you know the facts right and maintain a credit score that is above 700 to acquire financial assistance whenever needed.