The single most important thing to note about a low credit score is that not only may it prevent you from actually receiving credit, but you will also get a higher interest rate as lenders see you as a bigger risk.
The following chart will show you how a low credit score can significant affect your interest rates when applying for a car loan:
|Credit Score||36-month new auto loan||48-month new auto loan|
So what did we find out from this table, except the rich are getting richer? With a low credit score, you will end up paying 3 times higher interest rate than someone with a higher credit score.
If you still think your credit score doesn’t matter, I hope this explains exactly why it does. It’s not only about actually getting a loan, but rather how much interest rate you will have to pay for it. I’m sure you’ll agree it’s much more acceptable to pay a 6.6% interest rate than 18.5%.
A lot of insurance companies are lately using credit scores to determine your rates as well; the so-called insurance quote. If you read one of my previous posts you should also know it’s being used by a lot of other companies, as well as your employers. Credit scores are becoming more and more common and even more important with each passing day, so put some thought into it and boost your credit score with our tips today.