When was the last time you applied for a loan and it got rejected and you were clueless of what went wrong? Did you bother to check your credit score before applying for the loan? If not, it is time you get your credit report from any of the credit bureaus to know where you stand in terms of availing a credit from a bank.
What Is a Credit Score and Why Is It So Important?
Banks and financial institutions send monthly report of your financial details such as credit card and loan repayments to the credit bureaus. Based on the report, the bureaus generate a score in terms of numerical expression ranging between 300 to 900.
Credit score is the basic criterion, which any lender would take into consideration during loan evaluation process. A good score not only helps you in loan approval but also lowers the rate of interest on the loan.
How a Credit Score Is Calculated?
There are various factors involved in computation of your credit score.
30% - Past Performance
25% - Credit Exposure
25% - Credit Type and Duration
20% - Other Factors
What Does Your Credit Score Tell About You?
Credit score is a fine reflection of your credit behaviour. A good core is a result of your responsible spending and timely repayments. You have proved yourself to the lenders that they can rely on you with any type of credit.
Having a good credit score benefits you in many ways. Several employees refer to your credit score to assess you as a good score is a proof of trustworthiness and reliability. Quick loan approval and low interest rate are some of the compliments that you get for maintaining a good credit score.
A poor credit score is a result of loan rejections, hard enquiries written-off or settled account and late payments. The chances are minimum for individuals with a bad credit score to get a good deal on loans. It is time, you get yourself back on track with the help of a financial expert.
What if you do not have a credit score? It is never too late to begin. You can choose a score builder credit card or a personal loan to build your credit score. You will be assessed based on your credit score during the loan approval and other credit related products.
A bad credit score is not the end of the world and it is never too late to begin. Everything can be fixed if you have the right attitude and discipline. Lower your unnecessary expenses and focus on clearing your past dues. The rest will fall in places.
Are you now anxious about knowing your credit score? Click here to get your credit score for free!