Credit score is not just a three digit number but it’s a one creditworthiness in a numerical format. The range of this three digit number defines credit merit of an individual. The more closer to 900 score is, the better chances are of getting a good deal at the time of applying for a loan. Anurag Sinha, Cofounder & CEO, OneScore & OneCard, shares his knowledge on why credit score matters and the discrepancies that might be impacting your Credit Score.
He explains, “However regular checking of credit score is significant, not just to avail credit but because it has a direct bearing on —
-Access to credit
-Availing credit at lower interest rates
-To avoid falling prey to situations such as identity theft, among other factors.”
Citing an example, Anurag Sinha said, “For example, a default on a loan / continuous delay in payments can severely affects one’s credit score. This also accounts in case of identity Ghost loans or identity theft, a person is not even aware that a loan has been taken in his name. The person generally becomes aware only when the lender starts chasing for repayment or while checking the credit report.”
“In other cases, such as doing hard credit enquires, inconsistent address details, over utilization of credit card limit, open loan cases (despite the making the final payment and of tenure closure) – effects one’s creditworthiness. Majority of the people are not aware of how this is affecting and resulting a change in credit score every time. Therefore credit education is crucial to drive awareness,” he added.
“Besides lack of awareness lack of understanding on credit score also impacts one’s credit profile. Above are few use cases, highlighting the factors and discrepancies that’s affects an individual’s credit scores,” he concluded.
(Disclaimer: The views/suggestions/advice expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)