Few numbers will have as big of an impact on most people’s lives as their credit score. This score indicates an individual’s creditworthiness, which in turn can impact whether a lender will provide a loan, and if so, what the interest rate will be. Tyler Andrews Texas, president of CreditIQ works in credit rehabilitation and is going to outline some of the many benefits of having a high credit score.
“A high credit score can open up doors to many possibilities,” Tyler Andrews Texas, president of CreditIQ says. “With the right credit score, you may be able to buy your dream home, or you can pick up a reliable car that will serve your family for years to come.”
Credit scores range between 300 and 850, with higher numbers correlating with higher creditworthiness. If you have a high credit score, it’s often easier to obtain a loan to buy a home, car, or whatever else. Typically, you’ll pay less in interest as well.
To illustrate how big an impact credit can have, let’s consider a $25,000 auto loan set for a 60-month term. If you have a high credit score of say 800, you may be able to obtain a loan at 3 percent interest, which would cost you $449 a month to repay and you’d pay about $1,950 in total interest.
With a credit score of say 600, you might have to pay 10 percent (or more) in interest. Your monthly payment would top $530 and over 60 months, you’d pay about $6,800 in interest!
“With a high credit score, not only can you take out bigger loans, but the interest is often much lower,” Tyler Andrews Texas says. “Interest rates are extremely important and can have a huge impact on your finances. Having a low credit score is ultimately expensive for people, and with higher costs, it’s easy to dig yourself even deeper into a financial hole.”
Have you ever dreamed of owning your own business? Many people do. You can work for yourself and pursue your passions. Yet to start a business, you may need to take out a loan.
“Business loans can be hard to secure, especially if you have poor credit,” Tyler Andrews Texas, president of CreditIQ says. “Business loans tend to be higher in risk than say a car or home loans because many businesses fail. If you or your business have a poor credit score, obtaining a loan may be impossible.”
Obtaining a home loan is often easier than obtaining a business loan. If you have a high credit score, you may be approved for a large loan amount and interest rates could be low. If you have a low credit score, you may not be able to obtain a loan at all and could be forced to rent.
“Purchasing a home is a part of the American dream,” Tyler Andrews notes, “and it’s also important for your wealth. If you can buy a home now and enjoy a low interest rate, you can build up equity and wealth. When you retire, you can sell that home to fund your golden years.”
Sound dreamy? Sadly, if you have a low credit score, it may be an unobtainable dream. With a high credit score, however, you might be able to secure a loan to buy your dream house or to start your dream company.