How a good credit score can be a good money saver?

How can you determine your financial health? There are various significant factors that indicate your financial fitness, assets, current bank balance, etc. and a lot of other complex factors like your past investments and financial portfolio. However, an important element that’s often ignored is an individual’s credit score.

A good credit can benefit you with a number of essential expenses a whole lot economical. From better offering on loans to lot better affordable car insurance premiums, the rewards of having a good credit score are varied and numerous. Improving your credit score off the ground could be a source for you to win some pretty good rewards at the cost of some good savings. And there’s no better time than starting now!

How much can be saved?

If you take out a loan, a credit card or any other form of credit, then you’ll probably have to repay the amount with an interest for the sum you borrow. The higher the interest rate, the more you’ll end up paying over a due course of time. When you’re looking for borrowing a loan from either a bank or financial institution, the interest advertised is called as annual percentage rate (APR). But this need not necessarily be the interest rate offered to you; it’s simply an average rate. Whether you secure an advertised interest rate or a rate that is completely different will solely depend upon how much of a risk you pose to the lenders.

While, a good credit score can help you in getting a loan or credit card application approved, it may also help to save you a lot of money. Here’s how –

Low Interest rates

Before lending a loan to you, lenders will review your credit report to determine your risk capacity and set the interest rate on your loan accordingly. After all, a bank or financial institution doesn’t want to lose money if you default on your payments. The better your credit score, the less you risk you represent, the lower your interest rates will be.

Access to better credit cards

Credit card issuers are keen on signing up with customers that possess high credit scores. Due to high competitiveness in the credit card industry, credit card companies clamor for the business of customers who are worthy enough to repay their dues on time. Good credit cards offer 0% APR, with top notch perks and absolutely minimal or no annual fees. The latter can save you a lot of money on airfare, hotel stay and a lot of preliminary expenses.

Loan balance transfer

Lenders always check for your credit report before approving your application for a loan transfer along with a lot of other factors like your monthly income, employer, etc. If you have been a disciplined borrower with your past loans, it significantly improves your chances of getting a loan transfer application approved and then move to a lender offering you a lower interest rate.

Picking a lender offering a lower interest rate may help you in saving big sums of money in the long-run, especially in the case of a home loan where the loan amount and tenure are huge.

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