So, you have just become independent. Have gotten your first job and you are now in an excellent place to enjoy the perks that come with being an independent young adult. You are probably excited about the prospect of securing loans to get that car you have always admired. Financial institutions are coming to you with all sorts of offers. You probably think I will tell you to turn them down. No, I will not. This is because you need a starting point.
Having no credit is almost as bad as having bad credit. Take the offers given, but they need to be reasonable offers with reasonable repayment options. You need to remember that car you badly want will need to be fueled, it will need servicing. Every time you drive it, it will be taking money out of your pocket. Choosing a financial plan that ends up using more money out of your paycheck means you may not be able to drive your car as often as you would like and you may end up defaulting on your payments resulting in bad credit. The aim here is to have good credit so that you can experience the perks that come with having a good credit score as shown in this weblink.
You can confidently borrow more
Good credit means that even with a running loan, you will be able to get more if you need to. It is, however, essential for you to have a plan. If you have an investment plan, even better. Investing your loans is a better idea because then you will be able to repay the loans without it affecting your budget and consumption. Getting a loan to meet your basic necessities means the money will run out at some point yet you will still have this burden on your shoulders. Having a payment plan is crucial for you to have a good credit score as indicated in this weblink.
Negotiate for better rates
When a financial institution sees that they are not taking a risk with you because of your good credit score, they will be willing to accept your terms and give you lower interest rates. This means your monthly repayments will be smaller and more comfortable for you. If you have a bad credit score, the financial institutions usually give higher interest rates if they choose to provide you with the money. This is because they anticipate you will default at some point. By then, they shall have at least received a bulk of their financing. Planning to correct a bad credit score is important as seen in the weblink.