Lenders such as Banks, NBFCs, and mortgage companies use credit scores to decide loan approvals and interest rates. A higher score means easier approval and lower rates.
Employers may use credit scores to screen job applicants for positions involving money or high responsibility. A low credit score could be a red flag for an employer and could lead to your application being rejected.
Insurance Companies use scores to determine risk. A lower score can result in higher premiums.
You can negotiate a lower interest rate with a higher credit score rating.
You can get your loan application approved instantly and processed at the earliest
Your credit application will be accepted readily. Plus, you can apply for a new credit card without any hassle
You can obtain credit card with attractive features, rewards and benefits.
Some bank can waive your pre-payment charges and processing fee if your credit score rating is good.
It gives you greater financial flexibility and purchasing power.
You can secure desirable rental accommodations as it demonstrates your financial responsibility and reliability.
Some lenders and service providers may waive or reduce security deposits.
To improve your credit score in India, you should
Pay your credit accounts on time.
Keep your credit card balances low
Maintain a healthy utilization ratio
Avoid opening too many accounts.
Regularly do a Cibil score check for errors.
Building a positive credit history over time will help increase your credit score.
Several factors can contribute to a low credit score in India. Common reasons include:
History of late or missed payments.
Default on loans or credit cards.
High credit utilization
Frequent credit enquiries
Too many open credit accounts
A shot credit history
Negative remarks such as settlements or bankruptcies on CIBIL reports.