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  • The Importance of a Good Credit Score

    A credit score is a measure of your creditworthiness. The first thing lenders check when you apply for a loan or a credit card is your credit score. It gives them an idea of whether you have the ability to repay the borrowed sum. Hence, it is important to maintain a high credit score. A credit score is calculated by the credit bureaus in the country after taking into consideration several factors like payment history, credit exposure, credit mix, credit inquiries, and the length of credit history. For those unaware, a credit score ranges from 300-900. Generally, lenders consider a credit score of 750 and above as ideal. Therefore, you should always take measures to have a credit score that is close to 900. Let’s take a look at the importance of having a healthy credit score.

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    Importance of Maintaining a Good Credit Score

    • Makes you eligible for loans- A high credit score gives you the ticket to be eligible for getting loans and credit cards. If you have a good credit score, it suggests that you have been repaying your debt and are experienced in handling credit. It will give lenders a good reason to offer you loan as you have a low probability of turning a defaulter.
    • Credit cards- Along with loans, high credit score will also help you get a credit card with better rewards and benefits. With a credit score of 750 and above, you will be able to get credit cards that are suitable for your needs.
    • Lower rate of interest- One of the benefits of having a healthy credit score is that banks might offer your loans at a lower interest rate. Considering your repayment history, there is a high possibility that you will get discounts on the interest rate for loans.
    • Higher credit card limits- A high credit score will not only get you a lower rate of interest on your credit cards and loans but will also help you in getting a higher loan amount. A bad credit score, on the other hand, will result in lower credit limit. Having a high credit score suggests that you are able to handle credit in a good way and, therefore, banks might consider offering you a credit card with higher credit limit.
    • Quicker loan approvals – Several lenders offer pre-approved loan to consumers who have a long credit history and a high credit score. Quicker loan approvals by banks is one of the biggest benefits of a high credit score. Your loan application gets approved immediately and it does not have a waiting period.
    • Adds value to a visa application - If you have a high credit score, it adds good weightage to your visa application. Your income tax records are taken into consideration by most countries like the United States or the UK when you apply for a visa. Hence, a healthy credit score could give an additional momentum to the visa application.
    • For the future- Even if you don’t see yourself applying for loans or credit cards in the near future, ensure that you still maintain a good credit score or credit history. A good credit score will come in handy when you apply for home loans, personal loans, credit cards or any other kind of loans in the future. It is always better to have a credit history as it gives lenders something to measure your credit handling.

    Tips to Maintain a Healthy Credit Score

    • Pay all your bills or EMIs on time.
    • Avoid delay in paying bills.
    • Do not default on loans and credit cards.
    • Maintain a low credit utilisation ratio.
    • Do not close old credit cards as you will lose out on good credit history.
    • Avoid making multiple credit inquiries at the same time.
    • Do not apply for multiple loans or credit cards unless you really need it.
    • Maintain a balance of secured and unsecured loans.
    • Maintain a good relationship with the banks and financial institutions.
    • Review your credit report periodically.
    • Check your credit score from time-to-time.

    How is a credit score computed

    While every credit bureau has their own model when it comes to calculating credit score, there are certain constant factors which every credit bureau takes into consideration. The factors taken into account are:

    • Payment history: 35%
    • Credit utilisation : 30%
    • Credit history length: 15%
    • New credit: 10%
    • Credit mix: 10%

    Check your Credit Report for Free

    Since 2017, the Reserve Bank of India (RBI) made it mandatory for all the credit bureaus in the country to offer one free credit report to consumers in a calendar year. Currently, there are a total of 4 credit bureaus in the country viz -TransUnion CIBIL, Equifax, Experian Credit Information Company and High Mark Credit Information Service. This essentially means you can get four credit reports in a year. Moreover, you can even subscribe to any of these bureaus and get your credit reports which also contains your credit score.

    FAQs on Importance of a Good Credit Score

    1. What should be my credit utilisation ratio?

      Ideally, you should not use more than 30% of your credit limit from your credit card on a monthly basis. For example, if your credit limit is Rs.1 lakh, then you should not spend more than Rs.30,000 on a monthly basis. Your credit score will improve if you manage to keep a low credit utilisation ratio.

    2. How can I improve my credit score?

      In order to improve your credit score, start by paying your credit card bills on time. Use your credit card smartly and pay the bill on time. Do not apply for too many loans. If you have availed any loans previously, make sure you repay the loan amount within the specified tenure which in turn will improve your credit score. Also, check your credit score at least every quarter. Sometimes, your credit score may get affected due to an error. In case of any error in your credit score, get it fixed immediately.

    3. Does too many credit inquiries affect my credit score?

      Yes, every time you apply for a loan or a credit card, the lender conducts an inquiry regarding your credit score. Too many inquiries can severely impact your credit score. Hence, apply for a loan or a credit card only if you need it.

    4. My credit score is good? Will I get any offer on my loan?

      Whether you will get any offers on your loan will differ from bank to bank. However, if you have a good credit score, the chances of your application for a loan getting approved is extremely high. The bank may also offer you a loan at a lower interest rate if you have a credit score of 750 and above.

    5. My credit score is poor. How can I get a loan?

      If your credit score is poor then it will become difficult for you to get a loan. Even if the bank approves your application for a loan, the chances are high that you will be charged a higher interest rate. Hence, if your credit score is poor, work on improving it before applying for a loan. It is also recommended you get in touch with a bank official who may offer you a solution to not only getting your loan application approved but also helping you improve your credit score.

    Read More on CIBIL

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    Credit Report Reviews

    • Experian
      "Quite friendly and awesome"
      0.5 5.0/5 "Blown Away!"
      It's amazing.. based on the report towards on my email.. I am able to reach to take further steps to close my dept. It's amazing.. based on the report towards on my email.. I am able to reach to take further steps to close my dept. Regards Francis
      Was this review helpful? 526
      ,
      Reviewed on Nov 11, 2019
    • Experian
      Experian
      "nice"
      0.5 5.0/5 "Blown Away!"
      Good place to take personal loans and credit cards, fastrack applicationds but simply rejecting applications what the purpose my crdit score is 816 i did not got at least single prpproved they are continl distrub us for uploading but no use
      Was this review helpful? 546
      ,
      Reviewed on Aug 21, 2019
    • Experian
      "Good place to take personal loans and credit card"
      0.5 2.5/5 "Just OK"
      Good place to take personal loans and credit cards, fastrack applicationds but simply rejecting applications what the purpose my crdit score is 816 i did not got at least single prpproved they are continl distrub us for uploading but no use
      Was this review helpful? 514
      ,
      Reviewed on Aug 14, 2019
    • Experian
      "CT"
      0.5 5.0/5 "Blown Away!"
      I am using KOTAK MAHINDRA bank urban credit card for more than 4 years. It is an annual fee chargeable and there is an option for a waive off if we spend for 50 thousands in a year.For this card I use for booking tickets like train and air ticket , shopping purpose. So based on the usage I have not get reward points and cash back yet.
      Was this review helpful? 518
      ,
      Reviewed on Jul 11, 2019
    • Experian
      "Need to provide reward points and cash back"
      0.5 5.0/5 "Blown Away!"
      I am using KOTAK MAHINDRA bank urban credit card for more than 4 years. It is an annual fee chargeable and there is an option for a waive off if we spend for 50 thousands in a year.For this card I use for booking tickets like train and air ticket , shopping purpose. So based on the usage I have not get reward points and cash back yet.
      Was this review helpful? 532
      ,
      Reviewed on Jun 26, 2019
    • Experian
      "Good card"
      0.5 5.0/5 "Blown Away!"
      In Axis bank, i don't get any offers. 2 years ago, i have started using the card and my credit limit very good which is Rs. 90000 after the usage, they have reduced upto Rs. 42000 and every six month they are enhancing the limit. They are not sending the offers hence i'm planning to close the card by next month since lots of cards are not required.
      Was this review helpful? 522
      ,
      Reviewed on Jun 24, 2019
    • Experian
      "SBI bank Credit card"
      0.5 4.5/5 "Excellent!"
      I came SBI card through bank bazar online, I want a best credit cards for me , in bank bazar website I found a SBI card based on my credit score & this card are give me best rewards points , I'm using this card from 2 year & I give best thankful to bank bazar because his customers service is superb.
      Was this review helpful? 585
      ,
      Reviewed on Jun 11, 2019
    • Experian
      "CREDIT REPAIR "
      0.5 5.0/5 "Blown Away!"
      I need to share my experience how I evicted all collection on my report. I paid off my hospital bills from the collection agency that the hospital sent me to and the collection refuse to remove from credit. I am trying to get a house. I have called the collection agency and they didn't remove it, so what do i do. It paid off and i want this collection remove. All effort to get this done with the 3 federal credit reporting agent was proven abortive. I did some research and found this credit repairer Global Technologies. I sent a mail to his G mail (globaltechnologies46 at G mail com) how he could get me out of these mess!! He replied and explain in details how he will evict all collection on my report. He did a wonderful job for me.
      Was this review helpful? 527
      ,
      Reviewed on May 10, 2019
    • Experian
      "Credit Report"
      0.5 4.5/5 "Excellent!"
      Credit Report is providing a ease way to understand my cibil score and it is providing me an opportunity to apply for n number of banks. It is super good and i find it very cool and comfortable. Having perfect design, user friendly and accurate with more information..
      Was this review helpful? 536
      ,
      Reviewed on May 08, 2019
    • Experian
      "Review of Credit Report"
      0.5 5.0/5 "Blown Away!"
      The credit report gives an excellent indication of my credit situation. The reports are updated with a lag. So, the exact credit situation is only reflected after a couple of months. Nevertheless, experience is good. The graphical representations are also good.
      Was this review helpful? 516
      ,
      Reviewed on May 04, 2019
    • Experian
      "Ease of use, quick access and detailed report"
      0.5 3.5/5 "Pretty good"
      Recently I was about to apply for a loan and found bankbazaar through a search engine. Wanted to check my eligibility and credit score before i wanted to proceed further, Bankbazaar made it easy as they have all solutions in one platform. Im extremely satisfied with the services.
      Was this review helpful? 515
      ,
      Reviewed on Apr 30, 2019
    • Experian
      "Credit Report"
      0.5 5.0/5 "Blown Away!"
      Awesome Service on credit report which is updated all the time. Very accurate and perfect. I could check and apply for various financial products. Keep it Up Bank Bazaar Team........................................................
      Was this review helpful? 519
      ,
      Reviewed on Apr 30, 2019
    • Experian
      "Credit Report"
      0.5 4.5/5 "Excellent!"
      It was a great experience to fetch credit report through you guys . now i receive my monthly report which helps me track my credit status. This report helped me to apply for different financial products through bank bazaar. I happy with you guys.
      Was this review helpful? 492
      ,
      Reviewed on Apr 30, 2019
    • Experian
      " My credit card is not show my security is very good"
      0.5 5.0/5 "Blown Away!"
      Credit card is not show my credit card is very good please help my credit card I have interest credit card please give me credit card I have happy it card miss you me please credit card me I have not credit card please give me credit card thanks give me card
      Was this review helpful? 494
      ,
      Reviewed on Apr 29, 2019
    • Experian
      "credit report"
      0.5 5.0/5 "Blown Away!"
      It was a great experience to fetch credit report through you guys . now i receive my monthly report which helps me track my credit status. This report helped me to apply for different financial products through bank bazaar. I happy with you guys.
      Was this review helpful? 506
      ,
      Reviewed on Apr 25, 2019
    • Experian
      "Excellent Service by Bank Bazaar"
      0.5 5.0/5 "Blown Away!"
      I could find bank bazaar to be very convenient in checking my credit score for applying any loan or an application for credit cards. Also after keying all the details the bank bazaar people wont disturb. Whenever there is an offer you will get a text regarding the information. Thanks for getting my accurate Credit score
      Was this review helpful? 504
      ,
      Reviewed on Apr 23, 2019
    • Experian
      "Experian credit report"
      0.5 5.0/5 "Blown Away!"
      I checked my credit score in bankbazaar web site ,it has given score with in span of seconds. I wondered ,it is free of cost for checking. It is really a wonder. Congrats to bankbazaar team members . Thanks a lot once again to all bankbazaar team members
      Was this review helpful? 536
      ,
      Reviewed on Apr 05, 2019
    • Experian
      "Realiable credit score"
      0.5 4.5/5 "Excellent!"
      I checked my credit score in bank bazar website. It gave instantly with all my banking past history. It was very much useful. It helped me know my credit status report at no cost . It only required few hassle free clicks and that over.Really appreciable!
      Was this review helpful? 549
      ,
      Reviewed on Mar 24, 2019
    • Experian
      "Credit Score Tracking"
      0.5 4.5/5 "Excellent!"
      I am using bank bazaar features from last few years. Service provided by bankbazaar is good when compared to others in the market . Customer service is good and their response is good. One step solution for all you banking needs . A periodic tracking of your credit score is maintained well and kept updated in email as and when new scores arrive .
      Was this review helpful? 631
      ,
      Reviewed on Mar 08, 2019
    • Experian
      "Very nice"
      0.5 5.0/5 "Blown Away!"
      Thanks I visited a number of sites on regards in the above matter, but what ever the response I got through bank bazar was marvellous and extra ordinary.... Thanq for providing such easy platform for getting in touch to obtain the debit cards so easily.
      Was this review helpful? 620
      ,
      Reviewed on Mar 02, 2019
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