What is credit / cibil score
Credit/cibil score is determined on the basis of An individual’s credit history or in simple terms it is determined by the loan/credit card repayments . if a person pays their loan/credit cards bill on time. it will generate a good credit score. if a person fails to do any payment or do a late payment, the credit/cibil score may go down and effects the credit score. Financial Institutions check your credit score before approving your loan, first do you know what a good credit score should be. If not, then we tell you ,A good credit score is more than 750. Your loan or card can be disapproves if you have a credit score below 750 . if you dont have a pan card your credit score wont be generated and will be 00 so make your pan card first and start building a good credit score.
Why you should keep your credit score good
There are lots of reasons for which you should keep your credit score good,if possible, should be slightly more than average.
1. Credit card – Bank checks credit score first If a person’s credit score is less than 750, then he will not be issued a credit card. irrespective of their income and bank statements. bad credit score wont get you a credit card. so keep it above 750 only in order to get a credit card. with good credit score you can get a credit card if you are earning 10,000 per month only check our another blog post to apply for credit card. with minimum income.
2. Loan – Before approving any type of loan (car loan, personal loan, home loan) bank checks your credit score. irrespective of your income & monthly salary whichever is applicable. a good credit score builds confident with bank and the Bank sanction the loan easily on the Basis on your credit score. Note- every bank have their rules & regulations regarding loans and it differs from bank to bank. check our post on advantages of taking personal loans online
3. Interest on borrowings – A good credit score also helps you reducing interest rate to the minimal for any bank loan or credit card. remember A higher credit score will always benefit you.
4. Increased Limits OR high amount loan – Credit score not only lower interest rates on card/loans. it also gives you chance to be superior in the market, a person with good credit score always be issued a high limit credit card. person with high credit score can get loan of their required amount from the bank easily and that too with lowest interest rate. sounds amazing.?
5. Future needs – Even if you don’t applying for a loan or credit card still you need to maintain your credit score good. if you need to get a loan/ card a good credit score will help you like a charm. having no credit history or a bad credit score will cost you in future. so maintain a good credit score in present it will help you for sure in future if not now.
How to avoid a Bad credit score
1. Make payments of your loan installment or credit card bills, on or before time
2. Never in your entire life default any loan or card make payment, if you have consume the loan / card limit . always repay your credit.
3. keep your credit card usage low.
4. Do not close / surrender old credit cards.
5. Do not apply for too many loans / credit until unless its required.
6. Do not allow anyone to check your credit score until unless it is required. regular checking of credit score also decreases the credit score.