I have borrowed from a number of loaning facilities before. I have used payday loans, banks, credit cards, and even opted for credit union loans. With such a history, loaning experience has taught me a lot of things. One thing that I have learnt over time is that personal credit score plays a very fundamental role in a person’s borrowing. Here are the five reasons it really does.
Credit score determines your credit history. A great loaning history will give you a great credit score. Most loaning facilities consider any score above 600 as a great loaning credit score. It is therefore important that you focus on building your credit score as it will act as a factor that denies or grants you the loan you need.
A great credit score also proves your viability as a borrower. In short, apart from showing your history, it also shows whether you are capable of paying up the loan that you are applying for or not. Most lending facilities will only release their money upon realizing that you are risk free. A great credit score will show this ASAP!
If you have a great credit score you will also have a good bargaining power. Because your lending facility understands that you are a viable borrower they don’t want to lose you. Many lending facilities make money through borrowers that repay. This is their lifeline. A great borrower can haggle on interest rates.
Good credit score also boosts the confidence that a bank has on you. You have never been listed by any credit bureaus as a defaulter. Meaning that your loaning facility be it a bank or a credit union will also build some trust on you. You might therefore have lesser requirements than a person who is borrowing for the first time.
The fact that a credit score also samples up all the loans you have pending and the ones you have settled means you cannot borrow beyond your limit unless a loaning facility is willing to take that risk – which I doubt. This sampling helps you to consolidate all your money into good use and prevents you from borrowing aimlessly.
According to the best CU loans experts credit score also guides the loaning facility on what amount of money to give you. In other words is determines your loaning limits. The risk is therefore limited as the loaning facility understands to what limits they can lend you and within what range they should concentrate on too.
Finally the consideration of credit scores before a borrower is given any loan is a basic rule that acts as a guiding principle in the loaning sector. It runs throughout the major loaning platforms including banks, credit bureaus, credit card loans, and even payday loans. Therefore every loaning facility should consider it always.
You may write off your credit score as being cheap. Well one thing you should know is that with a poor credit score, every loan you desire would be a farfetched idea to work with too. So build on your credit score if you want an easy time.