Despite many efforts, adults fall under the category of unserved

A credit score plays a significant role in every consumer’s life, as it proves your worth in taking out apersonal loan. Many adults in India fall under the credit unserved consumer as they have never opened a traditional credit product. In contrast, those with at least some credit presence fall under ‘credit underserved.’ Around 480 million of the adult population of India are represented as credit underserved.

Specific efforts have been taken to deepen the credit culture to ensure that the borrowers do not fall prey to unauthorized money lenders. Here, this article will discuss the importance of having a credit score.

WHAT IS A CREDIT SCORE?

A credit score is a sign that indicates a person’s creditworthiness and ability to repay debt. It is represented through numbers based on a person’s repayment history.

IMPORTANCE OF CREDIT SCORE.

The credit score is a significant indicator to lenders of your position to pay the personal loan on time. A credit score is a numerical summary of your credit history. Financial institutions analyze your credit score to determine whether or not to lend you the loan amount. The analysis is based on the data gathered from lenders. The personal loan amount and interest are determined through your credit report.

There is a sign of credit score, which makes it essential for the population to have a good credit score. These are as follows –

• A lesser interest rate– A good credit score makes you liable to have better possibilities of getting lower interest rates.
• Higher loan amount – A good credit score helps you ask for a higher personal loan amount as your credit score stays in a good position.
• More extended repayment – You can ask for a longer loan tenure if your credit score is stable.

Monitoring the credit score can be done online. A medium to good score can increase the chances of getting approval for a loan. Use a personal loan eligibility checker can help you to know your credit score. You can use Buddy Loan app to get your credit report in a minute.

CREATING THE IDEAL CREDIT SCORE.

If you want to re-establish and build a credit score if they don’t have one, they can follow the following steps.

1. Getting a secured credit score – An secured credit card should be used as a conventional credit card. Having a credit card and making small purchases by ensuring payments on time can help you establish your credit score from scratch.

2. Be the authorized user– Being an authorized and loyal user always puts you in the right picture of your lender. Being an official lender will help you gain trust that will impact your credit score in a good way. These steps will help to establish sound financial health.

ENDNOTE

Individuals with low credit scores are still liable to get a personal loan, but the only fact is they might be provided with higher interest rates. However, many adults who fall under the category of credit underserved , they can understand the importance of credit score and its impact, as mentioned in the points above.

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