Article courtesy of CompareGuru
You are given a credit score based on your ability to pay back loans in the specified period of time. It is important that you make wise credit decisions and start to develop healthy credit habits. This means paying your bills on time, not maxing out your credit card and to avoid applying for multiple loans and credit cards at the same time.
Take a look at the many perks of keeping a good credit score:
Purchasing a car
With a good credit score, you become an ideal candidate for a car loan with either the bank of your choice or the car dealer’s bankrolling. LaToya Irby, a Credit and Debt management expert, says your total borrowing allowance will be based on your income and your credit score.
Showing that you have paid all loans back on time
indicates the likelihood of your most recent purchase being paid on time. “If you do get approved with a bad credit score, you’ll probably only be approved for a small amount, which may not be enough to accomplish your goal,” Irby explains.
According to Irby, people with bad credit scores are usually the ones who are filing insurance claims. For this reason, they are penalised with higher insurance premiums (as they are ‘costly customers’). Customers with a good credit score are proportionately given lower insurance premiums
Renting an apartment
But this shouldn’t affect you when you are applying for an apartment, right? Wrong, even more so as you are a bad bet for a financial institution and the landlord.
With the current rate of debt, rental properties are a big deal, with landlords and real estate agents only too aware of renters who try to miss out on monthly payments. Irby says, “More landlords are using credit scores to screen tenants. A bad credit score, especially if it’s caused by a previous eviction or outstanding rental balance, can severely damage your chances at getting into an apartment.” She further states that a good credit score saves you the time and hassle of finding a landlord who’ll overlook damaged credit.
Getting the right job
Believe it or not, having a bad credit score can even affect your ability to apply for a job. A bad credit score can signify negative character traits that some employers may not feel make a good employee. In most cases employers seek people with specific values, so if you are irresponsible with money, they may be hesitant to hire you and resulting in potential key career moves.
In control of your payments
A good credit score will save you time and energy when you really need financial aid and in times of emergency. You are even able to negotiate lower interest rates on your credit card or with a new loan with a good credit score.
“If you need more bargaining power, you can cite great offers you’ve received from other companies based on your credit score.” she adds.
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