09-Jan-2019 written by : FSI-Team
You must have probably heard from your friends and acquaintances that having a high credit score is really important if you want to get personal loans, credit cards, etc. easily. This is 100% true. However, what you may now know that a high score can make your life easier and more comfortable in many other ways. Some of these are:
Can your cibil score affect your job prospects? If your answer is “no”, then you are in for a surprise. This is because many organizations have actually started screening their candidates on the basis of their credit history. Even in India, banks like the State Bank of India have started to make it mandatory for the job applicants to have a clean credit history if they want to appear for interviews.
The reason why both private and public sector companies have started considering the credit score of the job applicants to assess their qualification is that individuals who have a high score are generally more responsible and disciplined than others. Thus, it’s possible that you may lose many good job opportunities if you don’t have a high score.
Studies have found that people who have a higher credit score are more likely to stay committed in their relationships than others (source: usatoday). Again, this has to do with the personality traits that are usually found in the “high achievers”. After all, you can’t build a high cibil score unless you have the discipline to manage your finances properly, pay the bills on time, and limit unnecessary expenses, etc. These qualities play a huge role in maintaining relationships too. So, by this logic, it’s only natural that people with high credit score are able to stay commitment far easily and for longer than those who have a poor score.
When you know that your credit rating is good, you are at peace. You know that if one day you need a loan on an urgent basis, then you will be able to get it without any problem. Similarly, if you want to increase the limit on your credit cards, you know you can make it happen whenever you need because of a good repayment history that can back your request. On the other hand, if you are struggling to keep your score intact, then it’s possible that are also struggling to pay your bills, maxing out your credit cards, etc. which can make your stressed and lead to deterioration of health.
Just like banks and other financial institutes, insurance companies have also started checking the credit score of the customers to determine their insurance premiums. If you have a good score, then you may get to pay a lower premium than others. This is because the insurers believe that individuals with high creditworthiness are financially strong which means they can pay the premium easily. Since they are believed to be responsible individuals, they are also expected to become less involved in road accidents.
Home loans are hard to repay. They have the longest term-length (20-30 years) and massive EMIs that force you to control your other expenses. However, if your credit rating is good, then you can refinance the loan easily in mid-term. In doing so, you can get to enjoy a lower interest rate, affordable EMIs, or reduce the term too. This advantage isn’t generally offered to individuals with poor credit rating.
Transferring your credit card balance to a new account is also easier with a good credit rating. In doing so, you can lower your debt and avail other perks that the card issuer has to offer.
By now, you can clearly see how it’s really important that you start paying attention to your spending and credit habits from today onwards if you aren’t already to get desired results. Good luck!