good credit score

We all understand that having a good credit score is important, but it isn’t always clear exactly why.

Mortgage broker Contractor Friendly Mortgages, in a new blog, has outlined five of the top benefits of ensuring your credit score is good.

Give a Good First Impression

You shouldn’t see your credit score as just a number. You should see it as the nice clothes you wear to your job interview, or the way you present yourself at an important meeting with a new client.

When applying for loans, mortgages, phone contracts, insurance and many other wonderful things, companies will check your credit score to determine if you are a low-risk client. The higher your score, the better you look. Imagine going to a job interview in your pjs, that is basically what you’re doing when applying for things like loans with a bad credit score (unless the job’s uniform requires you to wear pjs)!

More Negotiating Power

Having a better score will give you more leverage to negotiate lower interest rates on a credit card or new loan. With a good score you’re an attractive client, companies will have some reassurance that they don’t need to worry about you repaying what you borrow, meaning you have the power to get a loan or mortgage which is more suited to what you need!

With a low credit score, creditors are very unlikely to budge on any terms they have set out for the loan or mortgage they’re offering. And that’s assuming you’ve even got as far as speaking directly with the company, it’s difficult to even get your foot in the door with a bad credit score (hey that rhymed).

Cheaper Car Insurance

This is one of the more surprising benefits that is usually overlooked. If you have a higher credit score, you are more likely to be offered cheaper car insurance (and we all know how expensive it can potentially be!).

As driving a car has many risk factors involved, insurance companies consider risk very carefully when determining how much coverage you require. This is why they take your credit score into account, the higher risk you are, the more expensive your monthly payments will be.

You can never be denied car insurance purely based on your credit score, even if it is very low. However, it can greatly increase the monthly fee of your insurance.

Job Applications

This doesn’t stand for every job you apply for, but some companies may ask for your permission to run a credit check before they consider employing you. This mainly applies to jobs that involve managing money or a high stress job. They want to make sure your financial behaviour won’t have an impact on your performance at work.

An employer could even deny you are position in their business if you have a bad credit score, even if you fit the job description 100%. They could feel that your current financial situation will affect the way in which you would perform the job you are applying for. And this links back to good first impressions!

Peace of Mind

Contractor Friendly Mortgages takes peace of mind very seriously. When trying to get a mortgage, or a loan, or anything to do with your finances, not having peace of mind can make it a daunting and horrible experience.

When you’ve got a decent credit score, you can manage your money easier and go through your financial applications with confidence. Don’t underestimate the advantage, it’s a very powerful tool to have under your belt!

You can read the full blog on the Contractor Friendly Mortgage website.

Free Review

If you are not sure if you would be eligible for a mortgage due to your credit score, speak to Contractor Friendly Mortgages for a free mortgage review. Even if you are not looking now, it is so important to know what options are available to you going forward.

Mortgage lenders criteria has become significantly tighter due to the Covid-19 pandemic, so even with a high credit score there is no guarantee all lenders will say yes.

Request your Free Review Now.