A low credit score can lead to rejection of a loan or new credit card application. There’s also a possibility of lenders imposing a higher interest rate than usual and/or offering a smaller loan amount than what is required. Following are the ways in which a low credit score can impact your daily life.
Impact of Low Credit Score
1. Loan and/or Credit Card Approval
If you have a low credit score, lenders may turn down your application since a low/poor credit score is a mark of low creditworthiness. Any default or delay in the loan repayments gets recorded in the credit report of the applicant, which gets tracked by lending companies before any loan/credit card approval. On checking a credit report with a low credit score, lenders can get apprehensive in granting a loan or credit card to such applicants.
2. Higher Loan Rates – Lower Benefits
A low credit score will most likely impact your credit application in a way that it will either get rejected or be approved at higher interest rates. Maybe a low credit score won’t affect you immediately, but it might create a problem for you in the future. Therefore, keep checking your credit score on a monthly basis or once a quarter.
3. Lower Credit Score- No Pre Approved Offers
Even if you have an existing relationship with the bank, you may not get any pre-approved loan offers because of your low credit score. For example, you are a salaried individual with a good salary, yet you will not get any pre-approved loan or credit card offers due to the same reason of low credit score.
Note: Without your assistance/consent, no employer can pull your credit score. Your credit score is based on your credit history which includes factors like your payment history, how long you’ve been in the credit system, how much credit you’ve used, your credit mix, etc. So, how can you pull a lowering credit score? Click here to know how.
How can Paisabazaar Help you Improve your Credit Score
Follow the below-mentioned ways to improve your credit score through Paisabazaar :
- Credit Advisory Service: Paisabazaar also provides a credit advisory service that is aimed to assist customers in building a high credit score. It will help them get the best loans and credit cards at a low cost. Moreover, it helps the customers to first identify these reasons, and then prepare a plan of action to tackle them.
- Step up Credit Card: If you are new to credit or have a low credit score you can opt for Paisabazaar’s StepUp credit card which is a secured card provided against the fixed deposit opened at the time of card application. This card can shield you from a bad credit score and improve your credit score.
- Detailed Credit Report: From your first credit availed to your last payment of credit dues, Paisabazaar provides a detailed credit report including all the relevant information.
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