A good credit score opens up many benefits for you, as a borrower. To name a few, it will be easier for you to apply for a loan with friendlier interest rates. Find out more below:
1. Quick Approval Process
Those with good credit ratings get their loan applications approved quickly. A high credit score shows that the borrower is likely to honour the full payment of the loan, therefore, the lender will be willing to approve the loan within a short time.
2. Larger Amount Loaned
Borrowers with a high credit rating as well as a high level of income tend to get access to a higher amount in credit. This is because lenders have the confidence to offer a bigger amount to a borrower who has a record of paying his or her debts on time.
3. Lower Interest Rates
The rates of interest for loans offered to borrowers with a high credit rating might sometimes be lower. This is because applicants with high credit ratings are able to negotiate for lower interest rates. Lenders will be willing to approve lower interest rates for these borrowers as they have a lower risk factor than those who have poor credit ratings.
4. Variety Of Options
Borrowers with a high credit score will have a wider variety of lenders to choose from. This is because all lenders will be willing to lend to a borrower who has a good credit rating. This gives the applicant the advantage of being able to select the lender with the best terms and conditions. There are licensed moneylenders who give good rewards and the borrower will be able to target these lenders in order to get maximum benefits.
5. Lower Monthly Installments
Those with a good credit rating will end up paying lower amounts for their monthly repayments because of the lower interest rates offered. This will result in substantial savings especially if it is a long-term loan like a mortgage or a car loan.
6. Better Rental Opportunities
Some landlords might require a credit rating check of potential tenants before issuing a lease. Those tenants with a good credit rating will not experience the inconvenience of looking around for several months before getting a suitable place of residence. Like financial institutions, Landlords will be hesitant to contract a tenant who has a history of accumulating rent arrears.