Your credit score is more important than ever, as lenders increasingly rely on it to assess borrowers. Whether you’re applying for a loan, a credit card, or even renting a home, your credit score plays a crucial role in determining your eligibility. With recent changes in financial regulations, credit scores are updated more frequently, making it essential to maintain a strong score.
A higher credit score not only increases your chances of approval but also helps secure better interest rates and loan terms. Adhil Shetty, CEO of Bankbazaar.com, says, “If you have a poor score, getting financial assistance can become difficult, and you may end up paying higher interest. As more lenders integrate credit scores into their decision-making process, it’s crucial to keep yours in check.”
Let’s explore why a strong credit score is now a must-have!
Faster Credit Score Updates
Starting January 2025, lenders must update credit records every 15 days instead of once a month. As a result, financial activities will appear on your credit report sooner. If you make timely payments, your score will improve quickly. However, if you default, lenders will see it sooner, affecting your chances of getting a loan or credit card in the future. This makes responsible financial behaviour more important than ever.
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Loan Approvals and Interest Rates
A good credit score increases your chances of securing loans and credit cards with favourable terms. Lenders consider a high credit score as a sign of responsible borrowing. Banks and financial institutions are becoming stricter, making it harder for individuals with poor scores to access credit.
Shetty explains, “If you have a strong credit history, you can negotiate for lower interest rates and better repayment terms. On the other hand, a low score can result in higher interest rates or outright rejection of loan applications.”
More Financial Opportunities
A strong credit score doesn’t just affect loan approvals, it also impacts other financial aspects of life. Some landlords and employers now check credit scores before offering rental agreements or jobs, especially in high-paying sectors. Additionally, individuals with excellent credit histories may receive higher credit limits, exclusive offers, and rewards on credit cards.
Better Risk Assessment for Lenders
Lenders now have real-time data to assess borrowers.
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