Having a good credit score has a lot of advantages because lenders usually check credit scores for the purpose of providing credit decisions and background check details. Especially when you’re applying for a loan. Loans are gaining popularity in the Philippines nowadays since it helps Filipinos in many ways. From starting a business, pursuing higher education, or even making home improvements, and many more. So it is a must to build your credit score in case you plan to apply for a loan. Especially this time, everyone is striving to survive. If you wanted to know more about the advantage of having a good credit score this might help you.
What is a Credit Score?
A credit score is a number that is being used to know and determine someone’s capability to manage debts. Companies that offer loans usually use credit scores as a basis for whether to approve a loan request or not. Meaning, if you don’t have a good credit score there’s a possibility that you might not get approved. Having a good credit score will make a high chance of getting approved.
Advantage of Having a Good Credit Score
Have Better Chance for Credit Card and Loan Approval
Having a good credit score will give you a better chance of approval when applying for a new credit card or loan. Why? because most of the loan providers consider income and debts before approving an application. So lucky for you, if you have a good credit score that’s a plus point. Unlike when you have a bad credit score, your application might get denied.
Get Approved for Higher Credit Limits
Having a good credit score will allow you to qualify for low interest on credit cards. Banks will allow you to borrow more money since you showed them that you’re responsible enough and you have the capacity to pay on time.
Low Interest Rates on Credit Cards and Loans
Interest rate is the cost you pay if you borrow money. Usually the interest rate is determined depending on your credit score. So if you have a good credit score, you will most likely to qualify for a best interest rate. Meaning, you will pay less in your credit card and loans.
More Housing Options
Having a good credit score can help you in getting approval for housing and apartment rental. Especially if you’re aiming for a good and quality house like condominiums. In addition, good credit may also help you get a lower interest rate for a house mortgage. The better your credit history is, the higher chance of getting a good interest rate for your preferred housing option.
Better Car Insurance Rate
Most of the insurance company will use your credit card information such as credit report and insurance history to develop your insurance risk score. If you have a good credit score, you will pay less for insurance.
Ways to Improve Your Credit Score
Ways to Improve Your Credit
- Make sure to check your credit scores regulary
- Keep an eye on your credit reports for errors.
- Check how often you can check your credit reports
- Avoid credit card mistakes
- Make payments on time
- Keep credit card balances low
- Research and know some factors that go into a typical credit score
- Beware of quick credit score fixes
As a final point, all the things that were mentioned above was just a few of all the advantages of having a good credit score. Having a good credit score will provide you a lot of edge in many aspects. So make sure to build a good credit score as early as possible.