Credit score of an individual is a single numeral that indicates the creditworthiness of that person. Creditworthiness refers to the credibility of that individual to fend debts like loans, mortgages, housing loans, etc.

A credit score is equivalent to your financial reputability

Undoubtedly, the credit score is a numeric representative of your financial health and integrity.

Better credit scores will help you get the status of mortgage pre-approval faster; you can obtain loans and credits easily, you may not be subjected to any extensive procedure of getting pre-approved in case you want to apply for new loans in the future.

Thus one must always strive to get a credit score above 700.

Your credit score can prove to be a godsend while procuring a home loan

Imagine moving to a different city or state and going through the hassle of applying for your first mortgage, because evidently if you are moving to a tier 1 cosmopolitan city, borrowing a housing loan is unavoidable if you belong to the mid-income class.

Thus, with an impressive credit score, you can streamline the inconveniences of setting up a new account and security deposit and many more processes.

Below are few perks of owning a first-rate credit score.

Lower interest rates

One of the biggest rewards a good credit score can fetch you is lower interest on home loans. It makes you look reliable.

Your lender may not impose heavy interest rates as he gets a positive image that you cannot make any defaults in redeeming the credit. An unblemished credit history lowers your credit risk.

Thus a positive credit score means a low monthly instalment which means you save money.

Hassle free documentation process

One more advantage of having a good credit score is that you can qualify for a loan without documenting your assets, income and background in detail.

You can earn the ‘go-stated’ status which implies that you need not provide your pay slips for procuring the loan. You just have to disclose the last two years’ income.

If you qualify for a no-ratio loan with your credit score, you can disclose your income without pay stubs, bank statements or tax returns.

You can also get qualified for a no-income-no-asset loan which means you only have to disclose your name, social security number, the amount of down payment and address of the property you are going to purchase.

Although, fewer documents means higher risk for the lender. Thus, he may impose a higher rate of interest.

Freedom to shop

Since you will qualify for loans easily with your good credit score, you can shop around for lenders. You get the liberty to choose the lender which suitably fits your financial objectives and budget.

 Avail higher amounts

Your ability to repay the loan is judged by your income, assets and your credit score. A bad credit score will lead the bankers or lenders to give you approval for a lower amount.

But a commendable credit score can help fetch you higher amounts which can serve your purpose satisfactorily.

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