When a person portrays sound financial practices, it becomes easy to be given a loan from any reputable financial institutions. The officers in charge of loan disbursement will not tire calling you daily to access credit from their organization. However, this call for financial discipline, when you borrow money, ensure that you repay it within the stipulated time to maintain your credit scores high.
Otherwise, there are repercussions of having good credit whenever you are taking a loan and some of these include;
- Employers will be confident of a good credit rated employee because they will find a sense of financial discipline in the course of his duties.
- Insurance companies will not feel at risk when signing policy as they are sure that the premiums will be paid without strain.
- Banks that offer mortgage and personal loans will come looking for you for they are assured that their loans will be paid without the occurrence of a default.
A credit score is rated between 300 and 850, and for one to be termed as a person with an excellent credit score, you must achieve a credit of 800 and above. Any score that ranges from 600 to 750 is considered as average, and this is where the majority people fall.
When you have an excellent credit score, then it means that you can get the best loan rates in the market and the approval rate is very high and swift.
How to have an Excellent Credit:
- Credit Utilization ratio – This should be at least 30% of the overall available credit you are using at any one given time.
- Payment History – It refers to the timely payment of bills.
- Credit History – Have a consistent flow of borrowing.
- Account Opening – Limit the number of accounts you open as they will affect your credit.
Credit scores vary depending on the type of a loan you wish to apply for, which include applying an auto loan, Mortgage or even a credit card. It’s important also to research and know how different organizations rate their credits and settle for the one that best fits your needs.
Below is a brief analysis of each of the type of loan:
How to get a Personal loan with good credit
For a person to qualify for the loan, the below must information must be in place
- Your past credit history need to be clean without any challenges of repaying the already running auto loan
- The Income is sufficient to cover for the additional loan.
The borrower also need to research widely on the available financiers around because different financial institutions have different lending rates. The recommended option is to settle for the one that works best for you.
Does Credit Score affect your auto loan? The answer is yes because of the higher credit score, the better the interest rate of repaying the loan. Since different companies have different scores and so many offer auto loans, the banks may not be a favorable option compared with other dealers like the credit unions.
How to get a mortgage with a Good credit
Getting a mortgage at times is a hassle because it requires thorough scrutiny about the borrower’s credit discipline. This is because it is a large investment which will take a considerable amount of time to repay. As such the lenders will feel obliged to carry out a step by step appraisal to ensure that the money does not land into bad hands.
Therefore most banks will give a loan to a person whose credit is above 580. It may be considered fair, but the problem lies with the interest rate. A borrower with a credit score of 700 will pay less interest than the one who is at 600.
Again, a good credit score will improve the chances of loan approval since there is already the built confidence that the person is capable of repaying back the loan.
Where to Get Loans With excellent Credit.
In the current society, any person who wishes to be advanced a loan can quickly do so because many available options are there to support. They include supporting business people, government employees, and privately employed employees through signing if a memorandum of understanding among many.
The various sources of financial institutions include the banks, trade Unions, Mobile money lenders, Peer to peer lenders all who advance loans in return for an interest rate.
- Home equity Loans – These loans are enormous, and the source of security is your own home. They are friendly loans so long as you have a good credit rating as the repayment will matter on how one will be charged the repayment on a monthly basis. However, one must have a sound credit history to access the loan.
- Banks and Credit Unions – This is where the highest population land themselves into. The average credit lending rate for bans is 670 though it depends on the bank the bottom line lies that the better credit rating, the lower the interest rate.
Credit loans are also favorable options, and this may be a direct guarantee that you can be given the loan. They are Sacco based, and the savings in your account will enable you to get the loan as required. They will still ensure that you have good credit before disbursing the loan.
When all this is said and done, there are other conditions that you must meet to qualify. These include;
Details of your current employer and the recommendation thereof.
Identification documents such as the passport.
- Bank statement for a given number of months.
- Payslip as a proof that you are capable of repaying the loan. For business persons, ability will be determined by the history loan repayments and how the statement is
- If the loan purpose is for auto, there should be an attachment of a logbook, and this will be released after the loan has been repaid to completion.
Before committing yourself to get a loan, always research and ensure that you are getting into a contract with a reputable Organization to avoid disappointments and financial regrets.
Otherwise, improving one’s lifestyle is only possible with an extension of a loan but then, ensure that financial discipline is core to maintain excellent credit.