The world of finance is constantly changing in today’s day and age and thus making life harder for some people. Not everyone has an unlimited amount of wealth and can buy what they desire at one go. Therefore certain people take the help of loans at times to fulfill their wishes or even their necessities. Loans are based on various factors and one of them being the “Credit Score” of a person.
As many people know that having a good credit score is extremely important, but not all of them know how it can be beneficiary to them. The truth is that having a good credit score opens up a lot of options which can simplify a person’s life and make it better instantly. Thus to help you understand more about this the following are the advantages of maintaining a good credit score.
1) Faster loan approval
It is a common knowledge that acquiring loans is a hard job as there are many factors which financial institutions take under consideration before granting the loan to any person. Having a good credit score significantly increases the chances of any person getting their loan approved faster. The same can even be applied in the case of credit cards too.
2) Lower interest rates on loans
Maintaining a good credit score is not only going to look good while applying for a loan, but it will also ensure that you get a lower interest rate thus helping you pay off your debt faster with any worries. The rate of interest is entirely reliant on the financial institution from which you are borrowing the money and no matter the situation the rate of return interest is bound to fall if you have maintained a good credit score.
3) Grants you the power of negotiation
Not many people know this but while applying and getting a loan a person generally has the authority to negotiate and get the interest rate according to them if they feel they have a good banking history to show to the financial institution. Thus maintaining a good credit score will only help you get various offers from many financial institutions, thus giving you an authority using which you can then negotiate the terms of the interest rate with any worry.
4) Better chances of getting a good job
In today’s world getting a job is not an easy task as companies have started to be stringing with their screening process and choose only the best out of the many people who apply to them. Maintaining a good credit score is undoubtedly one of the ways by which you can tip the scale toward your side increasing the chances of you landing the job. Companies generally do look at credit score as no company will hire a person if their banking transactions look illegitimate and if the credit score of the person applying for the job is below the ranking set by the company.
5) Easier to rent a house
To own a house today has become extremely easy as anyone who has a working bank account and a few documents can get a loan. But the factor which plays an essential role in this is that the amount of interest charged by the loan offering company is bound to vary. A good credit score will undoubtedly get a person a lower rate of interest which can allow them to repay the money sooner but a person who has a bad credit score will not only have to pay more amount of money but will also have to bear the burden of borrowing the loan for an extended period of time.
Being financially literate is not only the job of the finance professionals – being financially literate has a lot of benefits, and everyone out there should at least have a basic idea of the financial world. You don’t need to know it all extensively – having an idea of the terms and then slowly increasing the level of your financial literacy is the best way. To get you started, here are a few terms which you get well-versed with:
Anything that you own is your asset. It may be your home, car, furniture – that is completely own comes under the category of assets. It has to be of some value so that it fetches you something if you sell it. Assets are generally used to clear off debts as they carry value. Assets are broadly classified into two – fixed and current. Fixed are immovable and cannot be liquefied, on the other hand, the current assets are movable and can be liquefied time.
Any debts or obligations that you owe to any other person, entity or financial institution is a liability. There are many categories of liabilities too – each varies on the kind of asset at stake and the duration for which you sign up for it.
3. Capital gains/loss
This is one term which you come across often in your day-to-day life. Whenever you sell any fixed asset for higher than it’s value, it’s a capital gain. And when you sell it lower than it’s value, it’s a capital loss. Basically, it is the profit or loss which you earn upon the sale of any capital asset.
4. Compound interest
The savings in your bank account are credited with interest that is calculated based on compounding. The basic idea of compounding can be easily explained with an example – suppose you’ve invested $100 at the interest rate of 8% per annum, it will amount to $108 at the end of the year. For the next interest calculation cycle, $108 would be considered, not $100. That’s what compounding is!
Another word you come across occasionally – a dividend is basically the reward you get for investing in shares. Whether you choose to keep it as it is (reinvest) or withdraw is totally upon you. But one thing is sure – this is one of the highest reaping investments you can make.
Money has become one such necessity, without which no transactions can happen and the world, on the whole, can go back into the stone age of the barter system. Everyone knows about money and how it works but how much do we know about it which can benefit us in the future? Thus to help all you reader understand the importance of money and how it can be beneficial for you here are the basic things everyone should know about money.
1) Income should always be more than expenditure
It is a common understanding that income of money into a person’s life will invite expenditure too, but this does not mean that you have to spend all the money catering to your every need. Having an income more than your expenditure will undoubtedly help you stay on top of your financial aspects and will also keep you far away from acquiring loans and getting help from various other places.
2) Start saving young
In today’s age parents usually, get a small toy bank at home and try to teach their children how to save money in them for the future. This is one such habit if inculcated at a very young age can be extremely fruitful for the future. Saving from a young age not only helps you save a lot of money over time for the future but also helps you by keeping you steady even if any form of financial losses come your way.
3) More the risk better the reward
Storing money in a bank or creating an FD account are two extremely good options as the money is kept safely in them and with time you are bound to get assured profits on it. But this will only amount to a small sum of money thus investing the excessive money in situations where there is a higher risk such as the stock market can help you make more money over time. Investing money is indeed risky as you may lose it but think confidently as you can win big too.
4) Insurance is a must
No matter if it’s for the business, your family or even for the things you own, having an insurance covering everything will only give you peace of mind. Yes, money will get deducted from your account regularly but knowing that even during the worst case scenario you don’t have to lose all your finances will only help you handle the situation better.
5) Minimize your debt
It is a common factor in this generation that people love buying things which are usually beyond their budget, while this may give one person a certain amount of happiness, but the crushing massive loan debt which comes along with it is no joke. Making sure to clear off debts as soon as possible should be every person main goal as it undoubtedly removes a certain amount of burden form a person.
6) Create an automatic saving account
Every human in the world at some point in their life does think about saving money but going to the bank to transfer funds into an account regularly is not a rational idea. Thus creating an automatic savings account can not only help a person by saving them precious time but at the end looking at the total amount which has been stored over the years automatically will only make ones future better.
In today’s world money is everything. While most of the people are happy with the amount of money they earn, not all want to stop at that stage and be satisfied with what they have. This is when the factor of investment comes into place.
Investing in today’s generation is an optimum way through which any person can maximize their existing money and who wouldn’t like more money for free? Investing is undoubtedly rewarding, but it is also risky as one slight mistake can make you lose all your investment at one go, but this will only happen if you make a mistake. If all things go well and your investment makes a profit, then money will constantly be flowing in without any worry. Thus to help you maximize your existing bank balance, here are few of the best ways where you can invest your money and a ton of profit by doing so.
1) Creating a Fixed Deposit
Creating a Fixed deposit is one among the safest ways through which a person can invest money and get guaranteed profits for it. Fixed deposit come under the low risk – low return part of the investment world. Every bank has a different FD scheme and the way an FD generally works is when a person creates an FD account and stores money in that for a certain amount of time they automatically become a small investor for that specific bank. The money is then utilized by the bank to grow their operations and when the period of the FD is about to mature, then the money is returned to the investor with profits based on the scheme they opted while creating an FD account.
2) Buying real estate
Investing in real estate is one of the best ways to ensure that you can make a ton of money as time goes. This form on investment falls under the high risk – high return investment where a person can buy a house, land or even a building based on the market condition. They can then lease it to anyone they wish on a contract which states that the leasing party will be paying a certain amount of money regularly for using the asset. This investment comes under long term investment; thus the return generally comes in slowly and it takes time for a person to start making any real profit.
3) Buying Government Bonds
This one of the safest forms of investment as buying government bonds allows the government to utilize the money invested by a person to develop the nation. This form of investment has no specific time period and the bonds can also be cashed in anytime a person wants.
4) Investing in the Stock Market
Stock Market is one of the riskiest forms of investment. Not everyone can start investing in the stock market on a random given day as it requires a lot of researching and analyzing. Investing in the stock market happens when a person buys certain small shares of the company in exchange for money which then can be utilized by the company to grow its business. As the business grows so shall the profits of the person who has invested the money.
5) Mutual funds
Mutual funds are companies which invest the money on a person’s behalf. Mutual funds companies have professionals go through various training and have a lot of experience as they are potentially investing another person’s money and one slight error in judgment can lead to a major downfall. Mutual funds are entirely reliant on the market condition and require constant monitoring to get the best outcome.
Having a strong record of loan repayment likely doesn’t make a difference presently (aside from if you need to take out private credits). However, it can have a significant effect later on throughout everyday life. In addition to the fact that it makes it less demanding to get affirmed for a condo or to find a new line of work, however, it can likewise enable you to score low-financing costs and better terms when you apply for an auto loan, mortgage, or new charge card. Two things you can do are get an understudy charge card and a verified card or credit-developer advance.
Figure out how to budget –
Among educational cost and supplies, lease and goods, you probably won’t have a lot of expenses. In any case, it’s as yet an intelligent thought to figure out how to spending now with the goal that you can more readily deal with your cash later on. Things you can do to structure and keep up a financial plan for your costs are:
Class of 2016 alumni left school with $37,172 in understudy advance obligation, as per a report by the Wall Street Journal. Not exclusively can that much understudy obligation make it challenging to get a home loan or different credits, yet it can even make it difficult for you to get by, period. Fortunately, you don’t have to depend intensely on understudy credits to traverse school. Instead, consider different approaches to take care of your school costs, including:
Part-time or all day work
Get all the student discounts-
Retailers comprehend that understudies don’t have a ton of cash, such a significant number of them offer limits to pick up your business. Gift voucher Granny records more than 100 retailers that offer such restrictions, including Apple, Amazon, Microsoft, a few eateries and the sky is the limit from there. Contingent upon how wise you will be, you could spare many dollars every year utilizing these limits when you shop or go out.
Protect your identity –
As an undergrad, you’re presumably increasingly inspired by your examinations and public activity than you are in watching out for your data. On the off chance that somebody figures out how to take your Visa data, Social Security number or other recognizing data, it could devastate your credit and take a long time to clear up. It can deteriorate if it makes you some time to take note. Generally, 16.7 million Americans succumbed to commercial fraud in 2017, as indicated by Javelin Strategy and Research. In this way, it’s fundamental that you watch out for your touchy data and avoid potential risk to counteract misrepresentation. Here are a couple of things you can do:
Sign up for credit checking
Keep an eye on your online records
Don’t give out your data effectively
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