How Credit Score Plays a Huge Role In Your Loan Application
When it comes to your loan application, even if you do not like it, you will be judged. Every creditor will look into your credit history before making a decision on whether to lend you or not. The credit score helps them determine your ability to repay the amount in due time. And if you have a bad credit, your loan application might be rejected. Credit score plays a very crucial loan in determining whether you will get the funds or not.
What is a credit score?
Before you approach the lenders, you should know what the credit score means and what it does to you. Whenever you apply for a loan, the credit score will come into play. There are a number of ways in which you can find your credit score. You could ask the bank to provide you with the same or can also request directly to FICO for the same. However, you might have to pay for it.
Lenders get their hands on your credit score whenever you make an application for a loan or a credit card. If you are applying for a personal loan, the borrowers with a credit score above 720 will pay an interest rate of 11 percent. The ones who have a subprime credit will pay much more than that and it could be as high as 29 percent. The ones with a very low credit score might not get a loan at all.
Build your credit
The truth is that a bad credit could mean you might not get a loan and if you do, you might have to pay more for the same. However, there are lenders that offer Personal Loans Solutions And Bad Credit Loans | Instant Online Approval with certain terms and conditions. Your credit score is not written on stone and you can change it. The best is to take a loan and build the credit or improve the credit before you apply for the loan. The first step to build up a credit score is to make the outstanding payments. Only when you clear off old debt, you will be able to apply for new. It might sound daunting and could take a little bit of time but it is the only step that will help you change your credit history.
Most of us use credit cards for daily purchases and the usage of the credit has an impact on our credit score. It is best to remain 30 percent below the credit card limit in order to boost the score. Use the credit card carefully and keep the deadlines in mind. Whatever you spend today, you will have to pay in the coming months and you need to be aware about the same. Building good credit is essential and it is not as difficult as it may sound. Bring financial discipline in your life and see how easily you manage to change your score.
