5 Reasons a Credit Score is Better Than a Background Check
Eyeing to buy a new house or a car? The good news is a loan will be your helping hand in finally owning your dream house or dream car.
But let’s face it, applying for loans can be a long and tiring process of background checks, which include filling up and signing a tall stack of papers. And before you know it, the house might be off the market. Fortunately, you can speed up and shorten the entire process—and this is where credit scores come into the picture.
A credit score is an accumulated data that is based on all your account information. Still not sure if you need it? Here are the reasons why a credit score is better than the traditional background check:
Saves time Loan processing includes filling up, reviewing, and signing a tall stack of papers to ensure that the applicant is able to pay back on time. However, it can be tiresome and time-consuming to both the applicant and lenders. On the other hand, a credit score can provide lenders a comprehensive summary of your account information in a shorter time.
Objectivity and fairness Lenders may have the tendency to judge or misjudge the applicants based on the personal information included in their background check papers; it can affect the lenders’ decision whether to grant the loan or not, making it time-consuming and also prone to human error. When it comes to credit scores, applicants and lenders are free from biased opinions. Credit scores reflect the applicants’ ability to pay debts, a solid basis for any kind of financial assessment.
Easy access and perks Unlike background checks, a good credit score presents opportunities to applicants. One of which is easy access to the best credit cards with larger credit limits, cash backs, and low interest rates.With this perk, you’ll attract lenders with your appealing track record
More negotiating power Unlike background checks, a good credit score can provide more bargaining power once you have proven yourself to be a responsible borrower. In addition, having bargaining power allows you to choose the terms depending on your financial situation.
Doesn’t include personal information Race, religion, nationality, gender, marital status, your address, and your total assets are not included in your credit scores, allowing the lenders to objectively review your application with fair judgement.