Most of us already know that a prime credit score helps to get approved for a mortgage, an auto loan, an auto insurance or a home insurance. The same principle is applying, logically, for personal loans. More than that, a better credit score will qualify you for a more favorable personal loan. First of all, that means you have access to convenient lenders, which will offer you a wider range of products. So you have the chance to choose a financial product which best fits to your current needs in terms of money amount, variable period of standard repay, possibility to reloan or to early payoff without penalties.
Not on the last, as better the credit score is, as smaller the APR and the interest rate are.There are a lot of ads or other online advertising about personal loan offers with low APR smaller than 36%. What is not usually specified in this kind of publicity is that for a reliable industry of personal loans, which includes a couple of costs – including the cost of risks management, an APR can be significant under this threshold of 36% only if the credit score of the applicant is around 680 points or above. Of course, this equation is indicative and relative.
But the main idea is that deserves to invest attention in order to maintain a good credit score. How? Especially, by not delaying the payments only because cosiness or forgetting the pay-dates and avoid as possible the overuse of credit cards with not really necessary expenses. The best paraphrase of recent advise from billionaire entrepreneur Mark Cuban is “don’t (ab)use credit cards”. However, keep in mind that improving the credit score will assure, anytime, full access to any kind of loans, including personal loans with friendly conditions.
One of the lasts (on 25th May) is still on the Forbes online edition, with the title “How personal loans can boost your credit score” – contributor Zack Friedman.
There are multiple factors used to calculate the credit score, basically based on personal credit history but also other collateral factors like having a stable residence and job, bills paid on time, a wife or a husband with a good credit score as well and so on. As our expertise is on personal loans, we would emphasize that even taking and enjoying the benefits of a quick personal loan will increase your credit score by taking into account the loan history. Maybe this sounds a little bit odd for you. But you can find easily a lot of articles about this.