Did you know that having a high credit score just means that you’re good at borrowing money? That’s your reward for making timely payments consistently for a long period of time.
On the flip side, your penalty for borrowing is called – Interest. The question now becomes, should I become a better borrower and stay in debt with a good credit score? OR, should I become a better saver and steward over my money with little to no debts owed and STILL maintain a high credit score?
Think about this – When you borrow money, you will now be charged interest as a penalty – for borrowing – so the amount you pay back now becomes greater than the amount you originally borrowed. Hmmm… Interesting, yet a brilliant concept – right?! It’s called being a Debtor to the Lender. How about switching this scenario and actually being in a position to Lend to someone in need instead of always being the indebted one.
Truth be told, it’s the lending industry that has put such a demand on having high credit scores. The belief system is that a high credit score gets you more and a low credit score makes you pay more – to get the “more”. While this holds a great deal of merit, specifically, when it comes to installment loan applications, car loans, and mortgages, lenders additionally have some negotiating power and may play an active role in making decisions on whether you are approved or denied credit. So let’s explore credit scores.