Any bank or financial institution do check the credit score of the person before giving loan or credit. Credit score contains information about your previous loan, EMI repayment on time and your credit report. This credit report tells you whether you are reliable in repaying the loan. In such a situation, if your credit score is not right, then start improving it from today, otherwise you may face financial problems further.
Important things related to credit score …
What is credit score?
- It is a data that is based on the credit history of a consumer and it assesses its credit worthiness. Credit lending companies and banks based on this score guess whether the customer will repay his loan on time. A person’s credit score ranges between 300 and 850. The higher the score, the more financially reliable an individual can be considered.
How to improve credit report?
- Pay all your bills on time.
- If your credit limit can increase, get it extended. However, keep in mind that you do not have to spend much, so that your credit card spending rate is low.
- Even if you have stopped using a credit card, do not close the account. Depending on how old the card is and the limit it has, if you close the account, your credit score is damaged.
Benefits of good credit score
If your credit score is good, then you can get a loan at cheaper interest rates. This simply means that the better the credit score, the less you will have to pay interest. That is, you will be able to fulfill your needs like buying a house car, planning a foreign trip, arranging for better education of children after marriage and raising funds for their marriage.