Importance of Credit Score and How to Maintain It
Posted on Thursday, June 8th, 2017 | By IndusInd Bank
Whether it’s buying something as small as a smartphone or as big a commitment as a house, we always search for various credit options, such as Credit Card EMIs, Housing Loans, Personal Loans, and so on, to ease the pressure on our current financial position. While that is an intelligent decision, maintaining a good credit habit and a good credit score is important to avail these options.
What is a Credit Score?
Your credit score is a record of all the past Loans or Credit Cards associated with you, along with your repayment history. Basically, it’s a one-stop place to pull out everything related to your ability to repay a borrowed sum. This data is checked for regularity or irregularity and helps establish your financial behaviour and discipline. Your credit score, in turn, helps Banks in gauging your intent for repayment in the future.
Why is a Good Credit Score Important?
It’s essential as it’s a deciding factor in whether you’ll get approval for a Credit Card, Housing Loan, Car Loan, or any another type of Loan. Banks and lenders want to be paid back, and if your credit score indicates that you are an unreliable borrower, you will not be applicable for these sources of credit.
How to Maintain a Good Credit Score?
Well, by developing healthy financial habits, you can keep a good credit score. Always pay your dues on time and keep your balances low. Also, it’s better to boast a healthy mix of secured loans (Home Loan and Auto Loan) and unsecured loans (Personal Loan and Credit Cards) as too many unsecured loans may be viewed negatively.
Apply for new credit in moderation as you don’t want to seem credit-hungry. You should also monitor your Co-Signed, Guaranteed and Joint Accounts regularly as you are held equally responsible for your joint holder’s negligence regarding repayments.
Moreover, clearing off all your Credit Card dues is vital for a good credit score. Plan your spending in such a manner that you clear off your credit balances before the due date. Checking your credit reports regularly is also a good idea because it reflects two things critical to your credit score – the presence of any defaults or delayed payments and the information recorded in the credit report.
We are certain that with this informative guide, you’d be able to manage your finances properly and maintain a good credit score.
IndusInd Bank offers a broad range of Credit Cards, specifically suited to your needs that also help you keep track of your spending. Visit www.indusind.com and apply for a Credit Card today!