You’re always on the advantageous side when it comes to borrowing if you have strong credit. You’ll always have an edge to easily qualify for loans or lines of credit with lower interest rates. The lower the interest you pay, the sooner you’ll pay off the debt.
Healthy credit generally improves a consumer’s creditworthiness. But that is just a part of the whole. In this article, we’ll walk you through relocation perks you can access if you have a good credit score.
Easier Approval for Rental Properties
No standard credit score is required to rent a house or a flat. The criteria for approval usually vary depending on the property, neighborhood, and landlord. However, a good credit score can help you zero in on properties you may qualify to rent.
Australian landlords and property managers are now pulling prospective tenants’ credit scores for screening. They usually avoid renters with damaged credit, especially if it’s caused by an outstanding rental balance or, worse, a previous eviction.
Poor credit doesn’t immediately disqualify a tenant, though. Tenants are given a chance to prove otherwise. They can provide documents emphasizing financial strengths like large upfront payments or a high income.
If you’re not in a hurry, it’s best first to improve your credit and build a credit history for a few months. But if you need to move as soon as possible, continue to find a landlord who doesn’t check credit or consider flat sharing.
Lowered or Waived Security Deposits
If you’re new to moving or a foreigner with no experience in this, security deposits (also known as security bonds or just bonds) are very common in Australia when relocating. They serve as insurance for property owners and managers.
If there is excessive wear and tear on the property, the costs are deducted from the security deposits. By Australian law, “excessive wear and tear” refers to broken doors, locks, fixtures, tiles, and windows in a rental property. It can also mean any tear, hole, stain, and mold in the carpet, wall, or bathroom caused by you, your pet, or your guest.
While the expense varies, security deposits could cost three times the amount of the rental property in Australia. But, on a positive note, some property owners and managers lower or waive security deposits if you have a good credit score.
Utility providers, such as cable, internet, phone, or electric companies, also require security deposits before initiating services in your rented flat or house. They use these deposits to pay your account if you miss or fail to make timely payments. They can be quite costly, as well.
But if you have a good credit score, you can easily open new utility accounts and avoid these steep security deposits. A strong credit score proves your ability to pay back your credit on time, so utility companies view you as a responsible consumer and waive security deposits.
Tenants with poor credit, on the other hand, are often charged a security deposit to open an account. Utility providers consider them as “high-risk consumers,” the same way lenders consider them as “high-risk borrowers.”
More Negotiating Power
A good credit score can be your edge if you need financing to vamp up your new place. It will always give lenders security, so they’ll consider you creditworthy. They’ll leverage it and negotiate even lower interest rates, waived loan fees, or better terms on a new loan with lenders.
To gain bargaining power, you’ll have to prequalify and check your rate with different lenders first. A good credit score will always attract great deals from multiple lenders. Then, take your rate estimate to various lenders to see if they can offer you even better terms.
Having strong credit as a bargaining chip essentially means you’ll get to choose and close the most favourable deal. Conversely, if you have poor credit, conventional lenders don’t make any concessions on the loan terms.
The good news is options like CreditNinja loans online can be your last resort. With online loans, you can still choose the best terms suited to your financial situation, even with bad credit.
Final Thoughts
No formula set in stone can ensure a strong credit score. But a well-managed loan always helps. It means you’ll pay your loans in full on time, every time. If you’ve been doing this in your long credit history, it’ll surely leave “a good credit recipient” impression on the lenders.
Avoid getting close to your credit limit and applying for a lot of credit over a short period as well. They hurt your credit score, and lenders will also likely see your economic circumstances as unfavourable, causing them to give you a no.