Your Credit Score affects certain areas of your life you’d never expect. Don’t believe us? Let’s take a closer look.
Most people remain unaware of the importance of their Credit Score until they apply for a Loan or a Credit Card.
Your Credit Score is not an arbitrary number. It is based on the information in your credit report. Fundamentally, it’s a numerical representation of your ability to repay a loan as per its clauses. It also stands for your reliability in terms of utilising credit.
Each time you apply for a Credit Card or a loan, whether it is a Personal Loan, Home Loan, or a Car Loan, your prospective lender unearths your Credit Score. This move is directed at gauging your credit worthiness, or more simply put, your capability to handle credit and repay dues on time.
So, it is quite clear that your Credit Score is a direct reflection of your money management skills. The higher the score, the more responsible and reliable you appear to lenders.
Your credit history, and more specifically your Credit Score, is a huge determinant of where you live or where you work. It can make important milestones in your life, such as moving to a new apartment or purchasing property, either trouble-free or gruelling. Intrigued? Keep reading to know more.
Bills to be paid
A high score implies that you are can be trusted with credit. If your score is in the range of 720-800, banks and other organisations that you engage with will charge you lower fees and lower interest rates.
A good score can go a long way towards inducing cell phone providers, Insurance providers, and utility companies to charge you less. A good credit history will make it easier for you to get services.
Additional Reading: Ways To Rebuild Your Credit Score After Bankruptcy
Getting the home you want
A low Credit Score is a sure recipe for not being able to own the house you’ve had your eyes on for a long time. The higher your score, better will be the interest rate on your mortgage.
Right after considering your rent-to-income ratio, your lender takes into account your Credit Score as the second-most important element while reviewing your application.
If there’s no evidence of you having made due payments on time, landlords may not feel sure about considering you as a tenant.
Before you start looking for your dream condo, know that a score of 720 or higher fetches you the best mortgage rates in the market.
Additional Reading: What Has Credit Score Got To Do With Home Loans?
Relationships
It’s quite well-known that money and other financial issues are one of the biggest reasons for disputes between couples. So much so that the way you manage your finances has the power to wreck your relationship with your spouse.
For instance, if your companion is fiscally responsible, but you’ve had quite a questionable attitude towards money, it can lead to a breeding ground for marital woes.
Here are a few things to consider. If you have a poor Credit Score, it may have a negative impact on your joint mortgage rate. Even a wee bit of financial worry can spiral into colossal problems. Therefore, the higher your Credit Score, the stronger your relationship will be.
Additional Reading: 2 Simple Ways To Increase Your Credit Score in 2019
Easy approval
Interested in getting your hands on that Travel Credit Card your friend has been rambling about? To qualify for premium Credit Cards with lucrative welcome bonuses and amazing cashback rewards, you’re generally required to have a good or excellent score.
A good Credit Score is the gateway to quick approvals. It’s not surprising that a good score will increase your chances of approval of your loan application.
While a low score can ruin your chances of using Credit Cards, a high score can get you pre-approved for rewards-heavy cards.
A spotty credit history, followed by a score in the range of 0-600 may compel lenders to decrease your credit limit. This can also be the cause behind multiple declined requests for Credit Cards.
Additional Reading: Is Your Credit Score Denying You A Business Loan?
Employment
Yes, you read right. Your credit behaviour also determines whether you will be hired for your dream job. Surprised?
An employer can choose to dig up your Credit Score before offering you a job. This is especially true for positions involving access to capital, sensitive customer data or classified information.
This is aimed at cutting down the chances of theft and fraud and assessing the trustworthiness and money management capabilities of a potential employee.
A checkered credit conduct can portray you as under-qualified and may force the employer to move on to the next candidate.
Additional Reading: Is Your Credit Score Good Enough To Get You Your Dream Job?
A poor Credit Score is like a ticking bomb. It can go off when you least expect. You may be blissfully unaware that your Credit Score is used by more than just lenders. Many companies factor your credit information for the sheer range of purposes discussed above. A poor score dug out by a prospective lender can keep you from buying a house, a car, or even landing that dream job.
Additional Reading: Harvest A Good Credit Score This Festive Season
We can’t insist on the importance of checking your score enough. Concerned about reducing your score by checking it too often? Relax. Your score will remain unharmed as long as it is a soft enquiry. Confused? Keep reading!
Here’s something that you must remember in order to become a Credit Score guru! Checking your own score amounts to a ‘soft enquiry’. On the flipside, when a lender examines your score to assess your credit worthiness, it qualifies as a ‘hard enquiry’. While checking your own score doesn’t reduce it, hard enquiries can bring down your score.
Additional Reading: How To Track Your Credit Score Like A Pro
By regularly checking your Credit Score and examining your credit history actively, you’ll maintain sound financial health and ensure that your credit rating is way above average. Not sure where you stand? Checking your Credit Score on BankBazaar is as simple as possible, besides being completely free.