A credit score is the most important thing that decides your creditworthiness although it itself is just a three-digit number. When you apply for a loan or credit card, this is the first and foremost thing that the loan provider will check. This provides an insight to the lender of whether you are worthy of repaying the borrowed amount. This is why it is very important to have a good credit score at all times.
Now you must be wondering how to keep this score good. It is as simple as making your payments on time, or for that matter, repaying all the monthly installments on time and keeping a check of your credit reports on a frequent basis. It is important that you pay off all your existing debt on the credit cards that you have and keep your credit utilization less than 30%.
Calculating the credit score Individual credit bureaus have their own credit scoring model with the help of which they calculate the credit score of the applicant. The score may be different for different bureaus, but the considering factors are the same for all.
What does the credit score say?
The credit score of any individual is basically a peek into the credit health of that
1.The current credit status can be known-Checking the credit score helps you to understand where you stand and what are the financial areas that you need to work on. With the help of the credit report, you get a summary of all your present and past credit transactions. This report enables you to check for any discrepancies that might have been the reason behind the lowering of your score.
2.Avail the best offers on credit cards and loans - If you have a good credit score, you will be able to enjoy the best offers on credit cards and loans. If you have a credit of 750 and above, you are lucky to enjoy the offers.
How can a good Credit Score be advantageous?
A good Credit score is very advantageous because of the following reasons -
● Lower interest rates: Having a good credit score will enable you to enjoy loans at a comparatively lower interest rate. You might be lucky enough to get a discount on the processing fee as well or may be eligible to borrow a higher amount.
● Improve your chances for loan approval: With a good credit score to show, you can assure the lender that there is a low-risk with your profile and your loans will get approved easily.
● Eligibility for a higher credit limit: Having a good credit score, makes you eligible for a higher credit limit on your existing loan because of your creditworthiness.
● Easy to get a pre-approved loan: Last, but not the least, a good credit score makes you eligible for pre-approved loans as well from your existing loan provider.
So, having read through all this, hope you have by now understood how beneficial the credit score can be for processing your loans. Therefore, make sure to keep them good.