When you open the newspaper these days, you will be greeted by cheerful advertisements that promise deals, discounts, freebies, and special rates on everything from cars to mobiles to garments and what not! Diwali is around the corner and then it will be Christmas and New Year! We all love to get a good deal and save money whenever possible; there is a powerful tool that we overlook that can actually help us save money this Diwali. Wondering what it is? It is your Credit Score.
Really !! Can Your Credit Score Help You Save Money?
It’s natural for one to be a little skeptical when such claims are made; after all zero percent loans do not turn out to be actually zero percent or the discount promised has a small “*” with conditions apply which is not visible to the customer. However your credit score can really be useful in helping you save money this Diwali by getting you attractive deals and better rates.
How Can the Credit Score Help You Save Money?
A good credit score is a proof that you are likely to pay your dues and pay them on time. Banks or financial institutions look at the credit score in order to decide whether an applicant should be sanctioned a loan or not. A good credit especially a very high one means that most FIs will be willing to lend to you; this is what gives you as a lender a bargaining chip and helps you in saving money. Ideally a few months before one plans to apply for any loan they should try to focus on ways that help to improve credit score. If you have a good credit score here are a few ways in which it can add cheer to your Diwali:
Better Rates: If you have a high credit score then you can confidently apply to any financial institution (as long as you meet the eligibility criteria) and your application will be accepted. Thus you can compare home loan interest rates for various FIs and then approach the one which has the lowest interest rates; same is the in case you are looking at buying a new car. FIs might be willing to lend you at a lower rate (lower than the advertised one) also if you have a very good CIBIL Score. Difference of even half a percent can result in big savings as the principal amount especially for a home loan is huge. A good CIBIL score can help you save money every month by lowering your EMI!
Save Processing Fees: When you apply for a loan you have to pay the processing fees. Even if the loan is rejected this fee is not refunded. So next time you apply to another bank you will have to pay this fee again. With a good credit score you are saved from making this expenditure more than once. Sometimes banks may be willing to waive off the processing fee also when the applicant has a high credit score. All FIs may not be willing to waive of the processing fee even with a high credit score; this is where the applicant’s negotiation skills come in. You may or may not be able to negotiate a waiver; it’s definitely worth a try if you have a high CIBIL score.
Can Avail Short Window Offers: During Diwali there are special offers available to lure customers. You can buy the latest LED at special discounted rates, builders might offer reduced booking amount or other such deals and car dealers may offer some lucrative offers. So if you want to take personal/auto/home loan to avail these special deals you have no time to try to improve cibil score or re-apply in case the loan is rejected as these discounts are offered for a short window. A high credit score ensures your application is processed fast and you do not miss any such deals.
It’s time to make use of your credit score this Diwali; make your meticulous and disciplined approach to paying off your dues help you. Use your credit score to save money!