There comes a time in life that most of us will have to turn to a bank or a financial institute for a loan. Having dreams and aspirations are important, but they do come at a cost. Usually those costs are of two types, time and money. Whether it’s buying a new home, a new vehicle, planning an international trip, it all needs significant amounts of money.
That being said, let us assume that you need a loan to fulfil something that you’ve been planning for long. Unexpected expenses throw a spanner in the works for your financial saving plan. Well, that is where financial support comes into play.
Starting right at the top, before applying for a loan, you have to understand there are a few prerequisites that need to be given attention. First and foremost, your credit score. Over here, we will help you understand everything that you need to know regarding your credit score.
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What is a credit score?
A credit score is a numerical value between 300–850 that determines an individual’s creditworthiness. Factors such as number of open accounts, debt, credit card bills, loan and repayment history, etc. influence your credit score. Higher the credit score, better chances for you to secure a loan with a lower interest rate and enjoy many benefits..
Why to check credit score?
Keeping a regular track of your credit score and credit history can prove to be incredibly beneficial. This way, you will be able to identify your shortcomings and improve your credit score in different ways. It will also help you stay on top of any misreportings and rectify such errors as soon as possible.
How to check credit score with Lazypay?
LazyPay’s Credit Shield, powered by CIBIL, makes it easier for you to check your credit score anywhere and anytime. You can get your credit report worth Rs. 1200 for free if you choose Credit Shield. All you have to do is provide your mobile number and input the OTP sent to you – that’s it!
What are the benefits of a good credit score?
If you have a good credit score and ensure you stay within that range, you are guaranteed to enjoy some benefits. You will almost always qualify for the best (ow) interest rates and you can get approved for loans and credit cards without any hassleHere are some benefits you can enjoy with from a good credit score:
- Best rates on car and homeowners insurance
- Easier to apply and secure a loan
- Garner a good reputation among lenders
Why are credit reports used?
A credit report is a detailed synopsis of how efficient you have been in paying bills and staying on top of your repayment of loans (if any). For a lender, the credit report will determine whether you are a suitable candidate or not for credit. It will also lay down the terms on which the credit line has been approved.. It is important to check your credit reports regularly to ensure the information is accurate and complete.
What is the Difference between a credit score, credit rating, and a credit report?
Credit score and credit rating are often used as interchangeable terms and considered to be one and the same. But there are certain significant differences between the two. These are –
- A credit rating is more for government or a business and determining their creditworthiness whereas a credit score is meant for an individual.
- A credit rating is in a letter grade format – Triple-A ratings for those governments or corporations with a healthy capacity for meeting all financial commitments followed by a double-A, A, Triple-B, Double-B and so on, until D for default. Credit scores are numerical values such as Fair Isaac Corporation score or FICO score. These scores are 3 digit numeric representations of an individual’s creditworthiness and range from 300 to 900.
FAQs on Checking of Credit Score
Why is a PAN card required for checking the credit score?
A Permanent Account Number (PAN) card is required while checking your credit score since it is an individual’s personal identification document.
Can credit score inquiries affect the score?
Yes, credit score inquiries can have a negative impact on your score. According to FICO, one credit inquiry on most people’s credit reports will reduce five points or less off of their credit score.
Why do we need a phone number for credit score?
A phone number is a piece of personal information and it is needed so that there is a way to communicate your credit score and credit report to you.
Is there a limit to requesting for accessing my credit score?
You are entitled to one free copy of your credit score of your three credit reports once a year.
How does your credit score change?
Factors such as loan history, credit card debt, consistency in repayment, open accounts and misreportings can affect your credit score and keep changing it.
