Credit usage is rather common these days, with most of us buying everything from groceries to gadgets on credit cards. In the present day, it is unlikely that you are not using credit in some form or the other. But if you are not careful about your credit usage, you may end up with a poor credit score. But what is the big deal even if you do land up with a poor score you ask? More than you can imagine! Let’s dive deeper into how you are likely to land with a poor CIBIL score and how it may impact you.
Maintaining a good credit record is no rocket science. All you have to do is maintain basic financial discipline. This includes repaying credit card bills and loans on time, maintaining credit utilisation below 30% and maintaining a good balance of secured and unsecured credit. Thus, if you regularly delay your credit card payments or do not service your loans on time, you may not only find yourself in the loan defaulter list, it will bring your credit score tumbling down.
Your CIBIL score is treated as a barometer of your financial health. If you end up with a poor score, it is unlikely that a prospective lender will be willing to take you on as a customer. This is because a poor score is reflective of your poor credit management. Even if you do manage to get a loan that you seek at times such as these, it is likely to be at a steep rate of interest that may burn a hole in your pocket.
A prospective lender requests for your credit report at the time your loan application. A report that tells the tale of poor money management, may work against you to the extant that you may not get access to credit when you require it the most. That is not all.
If you have applied for a coveted job at a firm that believes in complete analysis of a prospective candidate, a poor credit score can spell trouble for you here as well. Increasingly, firms looking for candidates to fill out positions of responsibility in the organisation, ask you to submit your credit report along with other important papers that speak of your eligibility.
If the assessment of your report shows that you are on the loan defaulter list or just have a low credit score on account of carelessness with your credit accounts, you are likely to lose the chance of procuring the position that you have been eyeing. Thus a person who does not have the basic money management skills, is unlikely to be thought fit to be in a responsible post in the company.
In our country, insurance premiums and rental agreements are not influenced by the credit score of an individual yet, as in the west, but given the fast changing dynamics of the financial world and globalisation of standards, the day may not be far away when insurers and landlords may refer to the credit score of an individual to assess the premium amount and rent respectively.
Thus, as in evident, a poor credit score impacts you in more ways than one. It is in your interest that you maintain a good score if you wish to get access to cheap and timely credit as well as apply for a job you have set your heart on and are working hard to achieve.