subject: Benefits Why You Should Increase Your Credit Score [print this page] Benefits Why You Should Increase Your Credit Score
A good credit score is the key to a lot of opportunities these days. A credit score can open up the door to a lot of opportunities and conversely, can shut the door of opportunities, depending on the credit ratings. An individual with a good credit score gets a preference over an individual with a lower credit score in loan applications for just about any product and is also favorably considered for a job application. In other words, high credit score is viewed as an indicator of the financial credibility and integrity of an individual.
Let us take a look at the reasons why you need to increase your credit score.
First, if you increase your credit score, your loan applications will be favorably considered by the banks and other financial institutions. Credit scores are checked for loan applications for just about any product (for example, home, car, and consumer). The credit rating agencies and the Fair Isaac Corporation (FICO) rate your credit worthiness and their ratings form the basis of the decisions by the banks on loan applications.
Additionally, you might also be eligible for other benefits like lower interest rates and friendly offers for additional loan products. These benefits are however, extended at the sole discretion of the banks.
Second, credit scores these days are being considered as one of the qualifying criteria for awarding a job to an individual. Obviously, the higher the credit scores, the better are the chances of an individual to secure a job and vice versa.
Linking the chances of getting a job to the credit scores has been criticized from many quarters as many think that this is unfair and credit ratings of an individual has no relation with the qualifications and skills for a job. However, the truth for the time being is that the employers do consider credit rating as a criterion for candidate screening. This is the reason you need to increase your credit score.
The paramount importance that is accorded to credit rating in determining an individual's financial credibility and integrity naturally has not been universally accepted. Many people hold that the entire system is faulty. According to these people, while the past can be an indicator of an individual's financial credibility, it cannot really form the sole basis of a judgment for the future.
For example, an individual with a low credit score but with an improved financial position applies for a loan and is denied the loan. In such cases, what is important is to not only take into account the past, but also the circumstances that led to a low credit score. What are also important are the individual's current financial position and the current credit worthiness and loan repayment capability.
