Credit Score: Your credit score should be good. A bad credit score can cause you a lot of harm. Many people do not check their credit score. Due to a bad credit score, banks or NBFCs reject home loan or car loan applications.
Credit Score: Have you checked your credit score recently? This is important because the approval of your application for a home loan or car loan depends on your credit score. Many people complain that despite paying bills on time, their credit score is not good. This disappoints them. They do not understand the reason for this. If your credit score is not good despite paying EMI, credit card bills etc. on time, then there is a need to understand the reason for this.
Credit Mix
A person’s credit score depends on many factors. Credit mix is one of them. It is the ratio of your secured and unsecured loans. If you take more unsecured loans instead of secured loans, it can have a negative impact on your credit score. Personal loans or loans taken on credit cards fall under the category of unsecured loans. Home loans fall under the category of secured loans.
Incorrect information in credit report
Many times the credit score gets spoiled due to wrong information in the credit report. Many times the credit agencies are not able to get the information about the account closure. In such a situation, your payment gets marked as default. This spoils your credit score. Experts say that by checking the credit report from time to time, such errors are detected. By getting it corrected, the credit score becomes good.
Default on payment
Many people pay their EMIs, credit card bills on time. But, if you have inadvertently defaulted on payment or made a payment late many years ago, then its effect can be seen on your credit score. Therefore, if you check your credit score properly, you may see such defaults. As soon as you pay it, your credit score will increase.
Payment Settlement
If you settle your loan by paying a smaller amount instead of repaying the loan in full, it has a negative impact on your credit score. If the bank or NBFC writes off the loan amount due to your non-repayment, it will also have a negative impact on your credit score. Therefore, loan settlement should be your last option.
Multiple loan applications
If you keep applying for a loan or a credit card all the time, it has a negative impact on your credit score. Every loan inquiry or application has an impact. It is believed that a person’s income is low, due to which he is more dependent on loans. Therefore, experts say that apply for a loan only when needed.
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