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5 Ways Credit Score Can Affect Your Life Research Team | Posted On Monday, July 01,2019, 06:15 PM

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5 Ways Credit Score Can Affect Your Life



A credit score is a 3-digit number which shows creditworthiness. A Credit score is maintained by the credit information agencies. Banks and other financial institutions send credit information (Customers Borrowing Data) to these credit information agencies like CIBIL. A credit score is the most important factor while availing bank loans.

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5 Ways Credit Score Can Affect your Life

Listed below are the 5 ways a credit score can impact your life:

1. Buying a Home:

Purchasing a dream home is one of the most common aspirations. Buying a home may require availing a Home Loan. Banks follow strict guidelines while sanctioning home loans. You must furnish necessary documents as well as have a good credit score, to get home loan sanctioned. Banks generally prefer individuals with a high credit score of 750 and above, for quick home loan sanction.

The reason is good credit score shows sound repayment history and responsible debt management. So, lenders are guaranteed timely loan repayments. A low credit score may impact home loan interest rate or may lead to rejection of the home loan application.

See Also: Check Credit Score Online

2. Getting a Credit Card:

Have you applied for a credit card with your bank and been rejected? Well, the reason could be a low credit score. Check your credit score for free on various websites and get to know your latest credit score just with a click.

Banks consider applicants who have an excellent credit score for credit cards. To avail a credit card that offers attractive bonuses and rewards like free movie passes, waiver on fuel, introductory bonuses, rewards and cash backs on shopping or paying bills and airport lounge access, you must have an excellent credit score.

In case you have average credit score, then you must work towards improving it and then apply for a credit card. You can improve credit score by paying your bills and loan EMIs on time. Do not apply for too many loans or credit cards at multiple banks, as this might impact your credit score.

See Also: Cibil Score For Credit Card

3. Buying a Car:

A car loan is a secured loan unlike personal loans. But, to avail a car loan at best interest rates and great terms and conditions, an applicant must have a good credit score. Banks do CIBIL check to understand the kind of borrower you are. A low credit score means you are not responsible towards personal finances.

Banks generally do not reject such loan applications, but sanction a loan at a higher interest rate. As car loans are short-term loans that can be repaid between 3 years to 7 years, a higher interest rate means a costlier loan and higher monthly EMIs. Try to maintain a good credit score while applying for a car loan.

4. Starting a New Business:

Working capital is the bloodline of any business. To grow and expand your business or to establish a new business, you need capital.

A business loan helps the businessman get the required capital at a lower interest rate. But, before applying for a business loan, you must check credit score. Business loans are generally sanctioned to those who have excellent credit score and good business track record. Banks may reject loan application if they are not satisfied with credit score. On the other hand, good credit history helps avail business loans at low interest rates.

See Also: Credit Score India

5. Getting a New Job:

Sometimes companies go through the applicant’s credit score, before offering the job. A credit score may affect your chances of getting the dream job. Some employers collect credit report from credit institutions before selecting the candidate. So, make sure to maintain a good credit score, while you are looking for a job change.

A poor credit score means you are unable to manage debts and finances. In case you have any pending dues or loan defaults, then your manager may consider you to be irresponsible.

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