What is Importance of Credit Information?
Your credit score signifies how eligible or creditworthy you are to get a loan or credit card from banks or NBFCs. If you have a credit score of 750 and above, then you shall be deemed as prospective customer for loans and credit cards from financial institution. Your CIBIL score can be between 300 and 900. But, if you are new to credit history, these scores have a different assessing system. Also your credit information is lot more essential than just securing credit cards or loan.
Apart from loans and credit cards, CIBIL score (if good, say more than 700) can help you get a new mobile plan and house on rent or home loan, easily. It is also a certificate in metaphor essence, for your economical status as to how reliable you are for repaying any type of credit taken.
Factors Negatively Impacting Credit Score
- Errors in CIBIL report (personal details, inaccurate debt details etc.). You can contact CIBIL about correcting errors in CIBIL report. The dispute if accepted will be resolved timely.
- Missing and delaying payments or running into a lot of debts at once.
- Unpaid credit card bills, crossing credit limit too often.
- Too many unsecured loans in debt file. You must take few secured loans as well, if you plan on to borrowing a number of times from banks and NBFCs.
Factors That Help Strengthen Credit Score
- Timely payments for loan EMIs and credit cards. Spending within credit limit assigned on cards.
- Never missing or delaying payments. Fixing CIBIL errors if any will help improve the credit score, which was earlier affected due to the errors.
- Taking more of secured loans than only unsecured loans.