Credit rating: Why you need a good credit score

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Having good credit rating comes with many benefits that many credit card users do not know. Life with a bad credit is stressful, and you cannot have peace of mind with it. But with good credit, you can live the kind of life you want, in a more comfortable way. There are many tips to improve credit score which can help you improve your living standards. Getting good credit rating is essential if you want to achieve your dreams. In this article, we shall look at some of the advantages of having a good credit rating.

Benefits of credit rating

Better negotiating power with good credit rating

When getting a credit card or loan, credit companies and banks tend to charge higher interest. But with a good credit rating, you get a leverage to negotiate for lower interest on the card or loan. The credit score will help you convince the lenders that you are capable of repaying and thus deserves a better rate.

Higher approval rates

With a good credit score, you stand a good chance of getting banks to allow you borrow more money. This is usually because people with good ratings are assumed to have demonstrated to the banks their financial stability. Remember that the borrowing capacity of an individual is pegged on his income and the credit score. With a good credit score, you would have shown the bank that you are able to repay the loan within a reasonable time. However, we are not saying you cannot get a loan with a bad credit score. What we are saying is that with bad credit score, you will be limited.

Low interest rates

Having a good credit score is essential if you want to get a lower interest on loans and credit card. This is because the issuers of the loan or credit card will always consider your rating before they decide the interest you will pay. Banks tend to charge more when an applicant has a bad credit. The low interest on your card is very important when shopping with your credit card. This is because you get the chance to avoid some of the extra debts.

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