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How your credit score affects your borrowing power?

Haris Saeed Haris Saeed , 7/27/2018
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There is a good chance you’ll need to apply for some financing during the course of your lifetime, whether you are looking to buy a new car, pay off some high-interest credit card debt or finance some home repairs or looking for Car title loans San Diego. Applying for a loan can be a bit of a daunting task if you have never applied for the loan before. The loan approval process goes through number of verification and documentation work.  The factors that affect the approval are current bills, credit score, income, unsecured debt and the purpose of applying for a loan. The lender consider all the factors and then decide whether to approve your loan application or decline it.
Recipient’s credit Score is the most important thing that is considered by all the lenders. It is a numeric representation of the credit history of an individual. The credit score helps a lender determine the creditworthiness of the individual who applied for the loan or credit card. Most of the banks rely on the credit scores as it is the fastest and most economical way for the lenders to identify good customers. The higher the credit score of an individual, the higher is the chances of their loan being approved and the individual getting a favorable interest rate and loan amount. The credit score ensures the lender that the recipient is not a risky bet and will repay the loan provided to them as he/she did in the past.
If you have a good credit score it is really good for you, it makes the loan process easier and will also help you get favorable loan interest. The loan application of the individual with no or low credit score are mostly declined. They are usually asked to increase their credit score and try later.

A good credit score brings a number of advantages to the individual over the one who has no or low credit score. Some of them are
1. Easy credit from the lenders:
The good credit score always help in getting loans and credits from the lenders quite easily as a good credit score raises the hope of the lender that you will repay loans on time.
2. Quick approval from the banks:
The banks try to give the loan quickly to the individual with a good credit score as the credit score states that you are a good customer to them. 3. Favorable interest rates: Individual with great credit score gets loans at a relatively lower rate of interests whereas the one with bad credit scores are granted loans and credits at higher rates of interest.

4. Authority to negotiate: Individual with great credit score gets loan approval easily and with lower interest rates. Moreover, they have negotiation authority to bring down the lenders to their preferred interest rate.

 A credit score is the first impression of the applicant in front of the lender. A person who manages his finances well will always have a higher CIBIL score. Hence, maintaining a great credit score will ensure great borrowing power for you!