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Why credit score is much more than just getting a loan

03-Aug-2018 written by : FSI-Team

When do we talk about credit score or even care for it? We know, only when we need a financial product. We do not care about it until we are in desperate need of a financial product. Is it that less important in our lives? Have you ever considered who all have access to your credit score and what can a bad cibil score do to your living?


Most of us have a perception that a credit score is only needed when you apply for a financial product. The bank or the lender check your credit rating and determines if you are credit worthy and if yes, the lender sanctions your loan. What many people do not understand is that there’s more to what you see when it comes to cibil score. A positive cibil score calculation can not only help you move financial mountains but also can help you boost your chances otherwise.

Today we will sight you, how a good credit score can help you,

Overdraft

While opening a bank account, the bank will pull out your credit report so that they can check if you are credit worthy and if you have any abandoned accounts in the past. If you had a rough financial past with a lot of late payments, bankruptcy, etc. the bank may not consider giving you the overdraft facilities and in some cases you may not get your account opened.

Credit card Companies

You must be getting a lot of calls from credit card companies offering great credit cards with excellent offers. This must be giving you a boost that, your stand is financial market is good that is the reason why, you get a lot of calls. Unfortunately that is not the case! When a tell caller calls you offering a credit card they do not know what your credit score is. They give you false promises on credit cards and huge limits, but when they check your bad credit score, they stop answering your calls and you are denied a credit card.

Utility Companies

There are high chances, the next time you go to purchase a postpaid SIM card; the utility company may pull up your credit score. You won’t be denied the product but you will be asked to pay a security deposit on the same.

Insurance Companies

Not only banks and lenders, the insurance companies also pull up your credit report. Your poor report can make you pay high premium on insurance as compared to market standards. The insurance companies consider your payment pattern to determine if you make your payments on time. More regular you are the less premium you pay.

Landlords

If you are house hunting as a tenant, there is possibility that your future landlord may pull up your credit details. This is just to see, if you are serious making payments of your existing lenders and if you will make rent payments on time. A landlord cannot directly access your report; he has to get the report via you.

Employers

When you apply for a job, you know before giving you employment the bank will conduct background verification on you. The verification process includes a lot of criteria’s which then confirms you a job. One the latest criteria’s of various potential employers is to conduct a cibil check to understand your financial standing and if you are good at making your payments on time.

Any other loan

A good cibil score can not only help you secure a loan but also help you in many other ways. For example, you apply for a home loan, a good cibil score can help you negotiate on home loan interest rates and also the processing fees.

There are lots of hidden benefits of having a positive credit score apart from just getting a loan. So, make your payments on time and live in good credit harmony.


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