Why You Need A Good Credit Score
A credit score is an instrument used by lenders to measure a borrower’s creditworthiness. It is based on a borrower’s credit history. Lenders use this to evaluate the probability that an individual will repay loans as and when due.
A credit score can affect your financial life. This is because it can determine whether a lender can offer you credit or not. Credit scores are between 800 and 300. A credit score of 700 or above is considered very good, and you may receive a lower interest rate because of it. A credit score between 670 and 300 is fair and poor.
Also, your credit score may determine the size of an initial deposit you need to make when you buy products, pay utilities to rent an apartment and so on.
So lenders rely on your credit history to determine your credit score. Your credit score changes based on new information on your credit history. For you to improve your credit score, you must pay your bills on time, increase your credit line, and keep a credit card account open if when not in use.
Keeping a good credit score can save you a lot of money. When you maintain an excellent score, your creditworthiness increases. You can always get lower interest rates when you borrow. This means that you pay less for any line of credit you take out.
As a borrower, it is up to you to make sure your credit score remains strong. It can give you access to more opportunities to borrow when you need to. Also, maintaining a good credit history and credit score can open other opportunities for you apart from borrowing. There are financial services that you can obtain based on them.
For more information on credit scores, you can contact us.