In today’s world, everyone is fond of assets. There are many types of assets available around you. Some are tangible like your properties, cars, money in the bank, etc. while some are non-tangible, like goodwill, brands, etc. When we talk about non-tangible things there is one more factor which can be an asset or a liability. Any guesses? Your credit score.
That’s right! Your credit score, your credit report is an important factor which if maintained regularly with financial integrity can be an asset, if you are not bothered about maintaining you loans and debts then the same credit report will become a liability. If your credit score is on the liability side, you will face a lot of issues financially and will take you to financial toss.
So what is this credit score and how will it affect me? I have no knowledge of me having such report, I have never encountered it. I don’t think it is that important, is it?
A credit score is a compilation of all the financial transactions you make. These transactions are recorded by the credit bureaus on the basis of your loan lender’s information they pass every month. It is used by your future lenders, when you apply for any type of loan or credit cards to check if you are credit worthy or not. If your score is on the higher side, you will get the loan in almost no time, but if you are on the low side of the score, you will face a lot of issues to avail the same.
Now you must be thinking, thank god! I am on the good side of the cibil score and will get a loan easily when needed. Unfortunately, this is not the case. Even if you have made all your payments on time and have tried maintaining a good cibil score, you may end up getting your application of loan rejected.
Here we will sight you possible reasons why your application may get rejected, despite having a good cibil score,
Your lender preferences
As we know there are a lot of credit bureaus in the market. The working and calculation of the score is different among these credit bureaus. If your score is good in CIBIL, might be a possibility the score would not be great in FICO. If the lender you are applying the loan from has different lender preferences you may end up with no loan, despite having a good cibil report.
Factors like your income and job
Even if you are in blue color jobs, your credit score may be on a higher side. When you apply for a loan the lender needs to understand your current salary and your current designation, if your salary is on the lower side and the amount you are expecting is high, you may be denied a loan.
You have too much debt already
As stated earlier, the cibil report has information on your financial status and if the lender sees too many debts on your account already, you will definitely be denied from a financial product. For banks, it does not matter if you have a great cibil score or low cibil score if your current liabilities are high.
Filed bankruptcy before
Each entry made on the credit report, stays on it for seven to ten years. From time to time, those entries fade away and the lender checks your current situation. But if the past, if you have ever filed bankruptcy, the entry remains on your account for a very long time and the bank does not fund any person who has files bankruptcy in the past.
In the past, information on credit score was never generic and people used to have a hard time understanding it. In today’s digital world, you have information at the tip of your fingers and you can easily figure out what to do and how to do in terms of credit score.
Your email address will not be published. Required fields are marked *
Nice Article. There is always pros and cons of every aspect. Indian Cu ...
Thanks for finally writing about >Why Indian women fall short on cr ...
Thank you for sharing your infօ. I reɑlly appreciate yⲟur efforts and ...
Daily Tips to stay Credit Healthy
© All Rights Reserved at Credit Sudhaar