Need a Loan: Have close eye on your Credit Score
If you are a college or school student then your examination score may impact your upcoming admissions, internships, or future job. Infect, still you have chance to bump up your score in coming years. In financial sector, your financial health, your financial repot, your financial soundness, your intentions in terms of financial dealings is being determined by your credit score which is calculated on basis of past financial behavior with any of financial institution in terms of loan or advances.
In India, there are some credit rating agencies which collect data from financial institutions and prepare a score which they reflect in their report card for assessment of any of prospective borrower for the financial institution. Credit information Bureau India Limited (CIBIL), Investment Information and credit rating agency (IICRA), Cooperative for Assistance and relief everywhere earlier it was Cooperative for American Remittance to Europe (CARE), Onida Individual credit rating Agency of India (ONICRA), FITCH and SMERA
In India due to lack of financial literacy, people are less aware about their credit score. Credit score determine opportunities they may be offered during course of their financial interactions. Lenders and insurance agents (among others) look at your credit score when they’re figuring out how to price the products they’re selling you. For instance, when you apply for your first car loan, the bank you’re working with will run a credit check to decide how much to charge you in interest on the auto note. A low credit score will mean paying a much higher interest rate. This, of course, will make the cost of the loan higher overall. Currently Bank of Baroda is offering interest rates on housing loan to their clients on the basis of CIBIL score. Pricing are being decided on the basis of credit score of the consumers.
Your credit score will follow you everywhere you go for the rest of your adult life. Since it’s checked under so many circumstances, there’s no point in time when it will stop mattering the way your GPA probably will. You’ll need it, and need it to be good, for as long as you’re participating in the financial system.
Again, this goes to show that the importance of working toward good credit might be slightly greater than the importance of working toward good grades.
When it comes to basic human needs, shelter is at the top of the list. Your GPA isn’t going to be very helpful when it comes to finding a decent place to live, but a good credit score certainly will be.
This is because most landlords will check your credit score as part of the rental application process, and many simply won’t accept tenants with bad scores. Of course, the same is true if you’re thinking of buying a home. If you don’t have good credit, qualifying for a mortgage will be nearly impossible.
It might seem strange, but your credit score could have an impact on your dating life. According to a 2014 Nerd Wallet analysis, more than half of single adults over age 25 are “somewhat less likely” or “much less likely” to date someone with bad credit.
Precautions required improving your credit score
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- Pay your bills on time.
- Avoid credit card debt; avoid maxing out a credit card.
- Use your credit card responsibly
- Don’t apply too much and frequently for credit
- Check your credit score regularly specially at least once in month
- Pay your loan installments on time.
- Don’t skip your post-paid, utility bill or credit card bill
- Rectify any error, if find during your regular checking of score.
If you follow and stick to these simple points, a bright financial future is definitely awaiting for you in the beautiful and logical financial world.
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