What are the benefits of having a good credit score?
No doubt, financial experts stress on the need to have a good credit rating. In a world where a credit score affects all facets of our lives, it is correct to say that having a good credit score is important. However, if you are new into the financial world, you probably are wondering why great emphasis are placed on the need for a perfect or good credit rating. Well, this particular post endeavours to outline or rather expound on the underlying benefits of having a good credit score.
Low interest rates
The idea of low interest rates is sweet music to the ears of many people across the globe. We are always complaining of high and runaway interest rates when we apply for a loan or even a credit card. Unfortunately, if you have a poor credit rating, you will have no choice but to bear the brunt of high interest rates on credit cards and loans. The same cannot be said of individuals with a high credit rating. The interest rate is in simple terms referred to as the cost of borrowing and is normally tied to your credit score. This means that a good credit score attracts low and competitive interest rates while a low or bad credit rating attracts high interest rates.
More bargaining power
Having a good credit score gives you power to negotiate for a better deal and even lower interest rates. With a good credit score, you can always counter offers given and even bring to the attention of your provider the calibre of offers you’ve received from other companies based on your credit score. In other words, you don’t need to accept what you’ve been given but can always negotiate for a better deal. A good credit score gives you that power.
Increased probability/chance of loan or credit card approval
It’s a no brainer that having a poor credit rating drastically reduces your chances of being approved for a loan or a credit card. However, when you have a good credit rating, you have a high probability of faster loan and credit card approvals. In other words, a good credit score gives you confidence in the knowledge that your application won’t be turned down when applying for a credit card or loan.
Attractive car insurance rates
If you are thinking of applying for any insurance cover, be informed that a good credit rating will ensure that you pay lower premiums. Insurance companies are of the belief that those with a poor credit rating have a tendency for filing claims on a regular basis and as such to cushion themselves, insurance companies tend to impose high premiums. The same cannot be said of those with a good credit score who enjoy competitive premiums!
No security deposit on a cell phone contract
It is a proven fact that getting approved for a phone contract with bad credit is akin to climbing a mountain. Those with a poor credit rating have to part with a security deposit and at times forced to go for a pay as you go plan. The same cannot be said of individuals with a good credit rating. They can easily get approved for a phone contract without the need to pay for security deposit prior to approval!