Your credit score influences far more than the loans you can get, and the interest rates you pay. Credit scores are used by insurers to set rates for car and homeowners’ insurance. They are used by landlords to determine who gets to rent their apartments. In other words, credit scores are a financial weapon, but whether they help you or hurt you depends on how strong they are.
A good credit score can help you get a good rate on loans, credit cards, insurance premiums, and rentals, among other items. Bad scores will force you to forego opportunities or pay more.
Low Interest Rates on Credit Cards and Loans
The interest rate is one of the costs of borrowing money, and it is often closely related to your credit score. When you have a good credit score, you will almost always be able to get the best interest rates and pay smaller finance costs on credit card accounts and loans. The less interest you spend, the sooner you’ll pay off your loans and the more money you’ll have for other expenses.
Better Chance for Credit Card and Loan Approval
Borrowers with a low credit background typically avoid applying for new credit cards or loans because they have been previously denied. However, having a high credit score does not guarantee acceptance because lenders consider your income and debt. A better credit score improves the odds of being eligible for new credit cards and loans. In other words, you can confidently apply for your loan or credit card.
Get Approved for Higher Limits
Your borrowing potential is determined by your salary and credit score combined. The advantage of a good credit score is that banks are likely to let you borrow more money because you’ve shown that you pay back everything you borrow on time. With a bad credit score, you might still be eligible for certain loans, but the amount may be limited.
RMLEFCU makes it easy to understand your credit score with SavvyMoney. We provide you with tools to understand your credit score and what affects it. To find out more, login to online banking. Have any questions? Give us a call at 303 458 6660 or email us at members@rmlefcu.org.