If you were posed with the question that why should you have a good credit score, then the most common answer would be to get a loan application sanctioned. Well, that is true and is indeed often the primary and most common use of a good credit score. However what if this good rating can help you in other aspects also. One added use of a good credit score is in securing a job; apart from that a healthy rating can help you save money too. If you are wondering how, then the following discussing is for you.
How Can a Good Credit Score Help Save Money?
A good score is important, that is something which most of us may be aware, but how it can be a money saver? Here we discuss a few ways in which it can help you save money.
Helps Save Interest Cost: Lender charge interest on loan for two reasons; first for allowing you to use money that does not belong to you and second for the risk that they undertake when lending. As we know higher the risk higher the interest at which the loan will be available to you. Thus if you have a good score you can approach the lender who offers most competitive rates as you are sure of getting your loan application approved provided you comply with rest of the requirements laid down by the lender. A good score also prompt the lender you a loan at lower rates because they would be assured of getting the money back. So whether it’s personal loan interest rate or home loan interest rate, even a change of half a percent could help you save huge amounts. Obviously actual saving would depend on the quantum of loan, but a drop in rate however small is welcome.
Gives You Bargaining Power: Another way a good score can help you is by giving you a bargaining power to negotiate favorable terms with lenders. This means you can get a concession or waiver on various additional charges like the legal fee or the processing fee and you could also get favorable terms on pre-payment charges. All this could help you save money on your loans.
Could Help you Land a Job: This is not as much save money as earn it. Lots of organizations are seeking credit reports of applicants before hiring them. So if you do not have a good CIBIL Score you could end up losing a job opportunity despite having the right qualifications and skills for it. Not getting the job you deserve or have the qualifications for because of poor rating could make you lose lot of money in terms of remuneration.
Lets you Access Funds When you Need Them. There might be times when you might want to get a loan sanctioned at a short notice. This may be due to some emergency for which you need funds or because there is a window of opportunity like a deal on a car that you want to buy. Not being able to get funds on time could mean that you could end up losing that special offer which means you lose money when you buy it without the offer. It could also mean that you have to borrow at higher rates to deal with the emergency or break your investments,
So as we said earlier a good score is your ticket not only to getting loans sanctioned but it also lets you save money in various ways. Thus being credit healthy at all times became all the more important.