Loans have become an essential element of our life, especially since the outbreak of the epidemic. Various banks, NBFCs, and fintech firms have all begun to provide loans to those in need, but some people have still had difficulty obtaining loans due to poor or no credit ratings. It should be mentioned that credit scores are often ignored by Indians.
A borrower’s credit score will very certainly be examined everywhere, whether it is for a house loan, an education loan, or any other loan.
According to industry statistics, over six out of ten millennials are denied credit cards, mortgages, auto loans, and other financial goods. Millennials between the ages of 23 and 38 had greater denial rates than other generations.
“This pandemic is a testimony to the necessity of Financial Independence in our lives,” says Vineet Patawari, Co-founder and CEO of financial market learning portal Elearnmarkets.com and stock market analytics platform StockEdge. The future is unknown, and prudent financial preparation is essential. A high credit score is required for simple loan approval.”
So, what exactly is a credit score?
Fair Isaac Corporation initially introduced this instrument, which has now achieved worldwide fame. Simply defined, a credit score is a numerical figure generated from a person’s credit files that represent their creditworthiness for any sort of credit instrument.
According to Patawari, “a credit score typically varies from 300-850, based on criteria such as overall levels of debt, number of open accounts, payback history, and so on.” A score of 650 or more is regarded as good, and the individual may be qualified for low-interest rates.”
A decent credit score may go a long way. According to experts, a strong credit score is key to a successful financial life. That is why many people actively seek information to help them manage their creditworthiness. Experts suggest that repaying debts on time is a fantastic approach to start improving one’s creditworthiness.
What steps can you take to enhance your credit score?
When it comes to paying bills, be on time. According to experts, one should not wait until the final due day to pay a payment; rather, one should strive to pay it in advance.
Inquire with your credit card company about a possible credit increase regularly. A strong credit history raises your credit limit.
Credit card accounts should not be closed. “Stop using the account but never close your account,” Patawari advises. It will be really painful.
Consult with credit repair firms. They do a variety of tasks such as negotiating with creditors and providing consulting.
Financial freedom, according to experts, is not a sprint. It’s a long race. Anyone may achieve financial independence with careful preparation and prudent investing.
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