Why is a good Credit score essential?

credit score

A good credit score is every individual desire. We live in a generation where our needs are unlimited and the resources are limited, whether it’s coal or money. Not everyone in the society is filthy rich and can meet their financial needs in one go. Therefore, individuals apply for loans and new credit cards from banks and financial institutions, to meet up their financial needs. But getting approval for a loan or new credit card by banks and financial institutions is not that easy. Banks and financial institutions prefer to cater to individuals with good credit scores. A credit score is the three-digit numeric description of an individual’s creditworthiness. It falls under 300 to 900. The closer your credit score is to 900 the more beneficial it is for you. A good Credit score unlocks the various benefits and creates an image that every bank and financial institution will love to cater to.

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Perks of having a good credit score

Meeting the financial need is one aspect, But meeting the financial need easily and by saving more money is everyone’s thumbs up. Having a good credit score can help you avail yourself of the numerous benefits with ease and save up your pocket from high interests. Some of the key benefits of having a good credit score are as follows:-

Lower rate of interest

A good credit score builds up a good reputation in front of the banks and financial institutions. Financial institutions and banks love to cater to individuals with good credit scores. Therefore they grant the individual a loan with ease and charge less interest rates from them.

Increases the chances of approval for a loan

The eligibility criteria may vary from bank to bank. But one thing remains common with every bank and financial institution and that is the Credit score. Every bank and financial institution prefers individuals with a good credit score to cater. Therefore having a good credit score increases the chances of approval for a loan by banks and financial institutions.

Access to premium credit cards

Premium credit cards are not accessible to every individual. Your creditworthiness is the key to premium credit cards. Your creditworthiness is described by your credit score. Therefore you need to have a good credit score while applying for new credit cards. By unlocking the premium credit card you can avail yourself of more benefits and ease of the process.

Increases the amount of loan and tenure 

Having a good credit score comes with a huge number of benefits and one of the best advantages of having a good credit score is that you can easily avail yourself of the increased amount of credit and as well as the increased tenure to payback.

Ways to increase your credit score

There are multiple ways through which you can easily increase your credit score and avail the benefits. Some of the ways you can follow to increase your score are billow:-

Repay the Bills and EMIs on time

One of the major mistakes that individuals make is that they do not repay their bills and EMIs on the given deadline. Therefore they face a decline in their score. To push up your credit score, you should pay back your bills and EMIs before or on the deadline date. 

Credit utilization

Credit card utilization is one of the important aspects to push up your credit score. Utilize the 30% of your credit limit to increase your credit score. This will create an image of your creditworthiness and won’t show that you are credit hungry. Usually, the banks and financial institutions do not prefer to cater to individuals with credit-hungry profiles.

Avoid applying for multiple credit cards or loans at the same time

Applying for multiple loans and credit cards at the same time creates an image of being credit hungry. Moreover, financial institutions and banks do not prefer individuals with a credit-hungry nature. Therefore you should apply for a loan or a credit card once and take a while to apply for a second time.

Check your credit score

You should have a CIBIL score login once. This will help you to stay updated about your score and discrepancies. You should rectify the discrepancies, which will help you to push up your credit score. There it is very much necessary to have a regular check on your credit score.

 

Read Also: Top 6 suggestions for raising your CIBIL score

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