Once you enter into a credit agreement, you are legally bound to pay your instalments on time every month. Failing to do this means you will have a bad credit score and history. By paying your instalments on time according to your agreement, you will get and keep a good credit score.
Benefits of paying your instalments on time
1. Lower interest rates
The amount of interest you pay is often linked to your credit score. The better your credit score, the lower the interest, meaning you have more money in your pocket.
2. Easy credit approvals
Credit providers use your payment history to decide whether they should grant you credit. By paying your instalments on time, you build up a good credit history. This will improve your chances of geting approved for credit when you apply.
3. More power to negotiate
You can use your good credit score to negotiate a better interest rate when you apply for more credit.
4. Higher credit limits
Credit providers will be more likely to increase your limit and lend you more money as your good credit score shows them that you can be trusted to pay back the loan in full and on time.
5. Easier approval for property rentals
To make sure they get reliable renters, landlords often use credit scores to verify that prospective tenants have a good record of paying rent. By making sure you have a good credit score, you can improve your chances of finding your ideal home.