A lesson for those who skip ‘check my credit score’ option

Credit scores indicate the financial health of an individual which is based on an individual’s or a borrower’s history of repayments and financial credibility. The scores prescribed by Civil range between 300 and 900 and scores above 700 and closer to 900 are considered happy scores.

Such dynamic scores are an assurance to the banks, creditors and lenders that the loan they give will be repaid. It gives them the chance to assess the borrower’s financial habits and whether he is responsible in money matters. However, there are people who have no credit history or have never taken a credit at all. Before we venture out on the topic in detail, let’s understand why it is important to have a check my credit score in the first place.  

When people with no credit history approach creditors, they give rise to the following three concerns

• The applicants intention to pay is not clear to the lenders as they don’t have a proven track record
• It is difficult to believe that with so many banks and financial institutions aggressively selling their credit cards and loans a person with a stable job does not have a credit card or consumer durable loan
• It also means that the applicant may probably not be having a stable source of income which puts a question mark on his repaying capacity.

Hence, most applicants with ‘0’ or ‘-1’ scores are turned down unceremoniously.  

What -1, 0 scores mean to creditors?

Scores that are ‘-1’ means you have no credit history making it difficult for the lenders to assess your repayment capacity. This type of score is also known as ‘NH’ or ‘No History’.

‘0’ scores mean that credit history information of less than six months is only available to the lending firms. These are also known as ‘NA’ or ‘Not Applicable’.

Don’t lose hope

Though those falling in the above two categories are heavily liable for loan rejection of applications not all is doomed as they still stand a chance of negotiating with lenders. Of course you may not get the best of terms, but then the EMIs could be lower and they could sail through the loan term with reasonable ease and raise scores for future financial dealings.

In conclusion: Lenders, creditors and banks are always, and rightly so, more comfortable to fund tried and tested customer at lower rate of interest than giving loan to a new or high risk customer even at a higher rate of interest.

So, if you do not have a great credit score. Don’t worry anymore. Check out more information on the topic by logging on to https://creditsscore.in/how-to-check-credit-score.