Credit Reports can make or break your success when it comes to lending money. But why is that? And how can you increase your chances of getting money from lenders by having a perfect credit report? That's what this special article is all about.
The definition of a credit report:
What exactly is a credit report?
First of all, what exactly is a credit report, and why is it so important? Basically, your credit report can be a financial asset that determines which financial product you can access. You can consider your credit report as your financial CV. This credential piece of information helps lenders to predict your possibility of paying back the borrowed money.
Your credit report includes details about your credit accounts (and whether or not you kept up with paying them back), your address, and all of your financial connections. It is also about how much you currently owe to lenders, as well as county court judgments (CCJs) made against you, in case there are some available. If you have been declared bankrupt, then it will also be the main part of your credit report, of course.
What’s not included in your credit report.
It does not contain how much money you have in your current account. Your salary is excluded from the pieces of content of your credit report, too. Savings accounts are also not a part of the credit report, as well as student loans. If you were a criminal in the past or not - it will not be found in your credit report, as well as your medical history. Parking and driving fines can happen, but they won't be found inside your credit report. Council tax arrears are also not included in your credit report.
How can a good credit report be beneficial for me if I want to lend money?
First things first - let's start with the obvious. A great credit report can definitely allow you to get money from lenders way easier than with a bad credit report. So having a great credit report is the opener for lending money and allows you to qualify for more financial institutions to give you money. While it is easy with a good credit report to get money, it can be very difficult to get money from lenders with a bad credit report. So it's always a good idea to start with a checkup first and figure out if your credit report is fine before applying for loans and getting turned down all the time because of your Credit report - according to Tung Nguyen, an fellow finance influencer at Tien Day Vi. Tien Day Vi is a finance, vay tien nhanh authority site. Follow them their Facebook page here.
Get the best terms and conditions and thank your credit report for it later.
The second main benefit of a good credit report is that you will get way better terms and conditions from your lender if your financial credit report tells you are a reliable person when it comes to borrowing money. And because of that, you are in a position of power and will be able to get money for cheaper interest rates than average. Also, the principal can vary a lot, and your chances of getting a lower principal rate are higher if you have a decent credit report.
Make it easy for financial institutions to lend you more money by providing a perfect credit report.
If you want to borrow a lot of money, the exact amount the lender will give to you can also vary regardings your credit report. Individuals with a fantastic credit report will have it way easier to get financed for a larger amount than individuals with a poor credit report. And because that is just the harsh reality, you will benefit from a good credit report also for the fact that you can lend money not only cheaper but also a higher amount.
Negotiate like a Sales Ninja
Negotiate like a Sales Ninja with a good credit report - with the perfect credit report, and the negotiating power sits in the palms of your hand!
You got your offer approved, but you need different terms for your loan? With a great credit report, the negotiating power is in your hands. Banks are flushed with cash and want to give it away nowadays. If you have a good credit score and a good credit report, you can determine the rules and budge on the loan terms!
Get your Insurance rate at their lowest with the perfect credit report and take advantage of AI that calculates your risk.
Having a bad credit score does also work against you when choosing the right insurance for your car. Insurance companies use the information out of your credit report to predict your likelihood of paying the monthly rates. And if they feel like you are more likely to fall short on some payments, they will protect themselves by charging you a higher monthly fee.
Call more for less
"Call more for less money by providing the perfect credit report - your service provider will thank you for it!" - Tung said.
The same goes for cell phone contracts. If the communication/service provider company thinks you are likely to not pay the bills at some point, they might increase your monthly rate to secure themselves against you not paying your invoices. So mark my words, and next time you want the new iPhone with a service contract, think of me. The moment you look at the monthly rate, you will know what just happened. Your credit report either worked for you or against you. You will be able to tell that it worked against you if the rate is high and that it worked for you if your monthly payments are low.
And now get your credit report yourself!
We hope this article helped you understand the importance of a great credit report and a good credit score (which go hand in hand usually) and makes you think of ways to improve it. Because life simply is easier with a great credit report.