About Credit Score
Credit score has become an important part to check creditworthiness of an individual. The credit score confirms the loan repayment ability of an individual. All the financial institutions like banks and NBFC companies take your credit score into consideration before approving your loan.
Your credit score depends on factors like total years of employment, household income, age of the borrower. Your credit score goes down if you have missed to pay an EMI earlier or have not paid the loan amount before the due date. The credit score can be improved if you repay your loans on time. A credit score of above 750 will help you in faster approval of the car loan in a short period of time. Also, you will have a low rate of interest that will save you lots of money.
Importance of Credit Score
There are many advantages of having a good credit score as lenders use borrower’s credit score to determine the risk associated with lending you the money. A good credit score is always preferred as it means the individual has a stable source of income and the probability of loan repayment is very high. Also, a high credit score means an individual is less likely to default on their EMI’s, which in turn enhances the chances of loan approval.
On the borrower side, a good credit score put the borrower in the position to negotiate on the interest rate, loan amount and tenure of the loan.
A good credit score can help a struggling business under proprietorship to avail a business loan. Not many know this, that a poor credit score can reduce the chance of being employed as the employers from sectors like IT & ITeS, banking and even the Government, conduct ‘financial credit screening’ as part of their recruitment process.
A poor credit score gives a bad impression to employers. Hence a good credit score has a positive impact on your professional career and your borrowing aspects in future. Hence, a good credit score positively affects your overall current as well as future financial prospects. It is certainly a good idea to ensure that you maintain a high credit score.
Check your Credit Score Online for Free
If you do know your credit score, then you can check your credit score online. Droom Credit gives the opportunity to check credit score for free in India just with a click of a button. To check your credit score, go to the credit score calculator and fill in the required details. Then, based on your details, the calculator will give you a credit score in the range of 0 to 850. Droom credit has four credit score categories namely High, Moderate, Low and Unsatisfactory.
A credit score in the range of 0 to 400 is placed under the Unsatisfactory category, which means that your credit score is too low, and your application is bound to get rejected. Usually, a credit score below 300 is not considered as a credit score, it is equivalent to zero.
A credit score in the range of 400 to 500 is placed under Low category, which means there are some chances that your loan application can be accepted but the rate of interest would be very high.
A credit score in the range of 500 to 650 is placed under Moderate category, which means that your loan application will be approved but you may not get best offers.
A credit score in the range of 650 to 850 is placed under High category, which means that your application will be approved for sure and that too at the lowest rate of interest. Also, there is room for negotiation on the rate of interest from the borrower’s side, if you are not satisfied with the offered interest.