There are a few bits of financial wisdom that everyone needs to follow. Having an excellent credit score is one of them. An essential part of your financial health, a great score unlocks doors to many benefits, from loan eligibility to visa applications. Anywhere between 700 and 900 indicates a good CIBIL score, making your lenders confident about your creditworthiness.

Here are 5 of the top reasons why you need to keep an eye on your score and find ways to improve it.

Quicker Approvals for Loans

If you have been planning to buy a house or a new car for some time, make sure you have a good credit score. A good credit score makes you eligible for many loans like home loans, car loans, personal loans, and more. Not only will the lender approve your loans quickly, but you will have bargaining power. This is because a good credit score shows that you can pay your EMIs on time.

With a higher credit score, you will be able to secure a lower interest rate which means affordable EMIs. A slight decrease in interest rate can help you save a lot of money over the loan’s lifetime. In addition, if you are building a new business from scratch and seeking working capital loans, a decrease in interest rates will help you repay the loan easily.

However, note that lenders also consider income level and debt to approve loans. Nevertheless, a good credit score will provide you with more confidence. You must pay the EMIs on time so that your scores improve. Paying off a loan is good to build a credit score. And when you use BNPL services, you start with a small credit line. When you pay off your bills with such services, you display a good reputation for repaying what you borrow, thereby increasing your credit score.

Get Approved for Higher Credit Limit 

A good credit score increases the chances of getting issued a credit card with higher limits and lower interest rates. In addition, the more you demonstrate good repayment capacity, the higher are chances of increasing limits. Thus when you make regular repayments on your LazyPay account, your credit score increases over time. However, note that if your use 50% of your credit limit regularly, it can hamper your score. 

Also, make sure you don’t apply for too many loans and credit cards in a short period. This is because the hard inquiry conducted by lenders on your application hurts the credit score. It shows that you are desperate for financial help. However, this is different from a soft inquiry, which is when you extract your credit information. While closing a loan is good for your credit score, the same can’t be said about credit cards. Closing a credit card account could impact the score. 

An advantage for Visa Applications

Add weightage to your visa application with a good credit score. While your income tax records are given more importance by countries like the US and UK for visa approvals, a good credit score also gives you an upper hand. This is good for individuals who might apply for higher education after a few years of job experience. It gives them time to build the score.

Some employers in the west also check your credit reports during the selection process. Your report should show good financial responsibility. If you plan for a work visa in a foreign country, you need to take your report seriously.

Get Lower Insurance Premiums 

You might want to protect yourself against future liabilities with a car or home insurance. A good credit score can help you get a lower premium amount. This is particularly important if you are an entrepreneur, and seek protection for your company fleet or business premises. 

To Get a House on Rent 

The landowner might take an interest in your credit score to lease you a flat or house. If you have a bad repayment history for loan EMIs or credit card payments, it could make them wary. You will need to spend time and resources once again to find a renter who won’t mind your bad credit history. Instead, keep a good credit score to get a house in a good locality.

Build and Check Your Credit Score with LazyApp

With all that said, Indian financial institutions remain hesitant to provide loans and credit to customers without a credit history. In the absence of these products, people can’t build one. This vicious cycle can halt aspirations and create problems during emergencies.

LazyApp offers you credit options to help you build and maintain a good credit score. The more you repay your instalments on time, it will reflect positively on your score. Further, LazyApp has collaborated with CIBIL so that you can check your credit score for free.

When you activate LazyPay Credit Shield, you can:

  • Check your credit score and access your credit report
  • Get alerts on missed payments and avoid misreporting
  • Use expert insights on ways to improve your credit score

Monitor your credit regularly to avail financial products at better terms. 

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