Importance of credit score in improving chances of getting a loan

September 1, 2013

Credit Score, Loans

A sturdy and strong relation with your banker and holding the right abilities to take credit decisions can improve your chances of getting loan. Going for a bank loan can be daunting, frustrating experience for those who those who do not have a good credit score. The so-called bankers with their list of credit instructions increase your confusion rather than giving comfort. Primarily, broadcasted by the credit granting companies to educate the individuals about the importance of a good credit score.

Lenders use credit rating to help them find out about whom to give cash and at what rate. So, it is important to show that you will prove to be a safe bet in the long run and you’ll pay all the dues by working your way out. A majority of people feel no mortgage or credit card payment will have an impact on their credit score- but both of these prove to be the major negative key factors while measuring a credit score. Understanding the importance of credit score is very important for all individuals who wish to seek credit loan for their business, child’s education or daughter’s marriage.

Paying off your mortgage loan leas to a positive impact- the bigger the amount of credit, the better repayments you’ll receive for your credit rating. However, it will cast a worst impact, if you fail to pay anyone of the mortgage payments, the order of importance of gaining better credit score is mortgage, loan, then comes the credit card, stone card and lastly your bank overdraft. The repayment of a bank overdraft gives you the minimum credit rating. One can also maintain a major credit score if he holds a credit card to his name and is regular in its payment. You should build up a good record of using card and making payments from time to time within the given time. This boosts your credit score and give you credit extension without any interest sometimes.

Always make sure that all your credit report information is correct and up to date. If you have any previous credit problem, then explain this in your submission report and add a correction notice to any late payments made along with the reason. If you have any fiscal link to other people who are no longer connected to you like your ex-partner then get it removed from your record. Close those accounts which you don’t use now. A lot of unused credit goes in accessing the unused account. And, further it may lead to a negative impact on your rating and make you vulnerable to fraudulent.

Thus, with a proper account maintenance, effective mortgage clearance, proper debt payments from time to time and clear status, you can easily get a loan with a good credit score. A good credit score gives you the benefit of borrowing a full-fledged loan amount. It preserves your loan application from being rejected and grants you a good stature in the eyes of loan giving companies.

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Credit decision