Your credit score is an important number that will follow you your entire life. Whenever you will need a home loan, car loan, personal loan, credit card, or even when applying for a new job (in some cases), your profile will be judged on the basis of your credit. Thus, it’s important to take care of your credit and keep the score high.
Bad credit holds you back in many ways, the top 4 of which are:
To get a loan with bad CIBIL score has become extremely difficult today. The banks are already struggling to resolve their existing Non Performing Assets (NPAs), and with new scams such as the Nirav Modi scam, Rotomac scam, etc. emerging on the surface one after another, it’s safe to say that no bank will ever take the future loan applications lightly.
Bad credit limits your loan options in many ways, but it also makes it harder to get a good home loan interest rate, personal loan interest rate, etc. This is because the lenders balance the lack of creditworthiness with a high-interest rate or terms that are advantageous to them and not the borrower.
Multiple studies have found that couples that share the same level of credit score are more likely to be happy with each other and face fewer relationship problems than those who have a big difference in their scores.
The reasoning behind this fact is actually simple to understand. Think about it- a person who has a poor CIBIL is more likely to have bad habits such as lack of responsibility, poor time and finance management, etc. Similarly, a person with a high CIBIL is more likely to be a responsible person who knows how to manage their time and money. And when two people who have vastly different personalities get into a relationship, then it can be difficult to make it all work out.
Credit cards are extremely useful. They can help you out when you are in a cash crunch, or when you want to buy something that you can’t wait for until you get your next pay-check. However, their usage can be greatly limited by the credit limit.
To make the most of your credit cards you must increase their limit as much as possible. However, just like you can’t get a loan with bad CIBIL score, you can’t easily increase your credit card limit unless you have a high score.
You would think that since you are willing to pay a premium amount set by an insurer, you should be able to get the best deal possible. However, that’s not always the case.
Just like the banks, the insurance companies have started taking into account the credit information of its customers for calculating the premium costs and adjusting the terms. They use this data to calculator your “insurance score” which allows them to predict how likely you are to have an accident or face health problems in the future.
For instance, if your credit history shows that you were paying a high home loan interest rate and were frequently late with the payments, then they may think that you were under a lot of stress. Thus, the risk on their end is higher, and so your insurance premium could be high too.
You can see clearly how bad credit can make your life difficult and challenging. Unfortunately, there is no other way to prevent this from happening other than working on your score.
If you want to build a high CIBIL, then the following tips are sure to help you:
Building a high score isn’t that hard if you are educated on the subject. So, be sure to keep the following tips in mind and protect yourself from bad credit habits.
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