Is a good credit score always enough to get a personal loan? The credit information bureau of India maintains a record of your entire financial history. The loans you have availed, your credit card, and your repayment history are well mentioned in your credit report. Hence, credit score and credit report are significant to prove your eligibility for a loan, but many financial institutions also study credit reports and credit remarks.
So, any negative remark on your credit report will negatively impact you while getting a personal loan. Credit remarks can reduce the chances of getting an instant personal loan. This article aims to further discuss what is credit score and credit remarks along with what is its impact on proofing your good financial health.
This article will discuss how good credit isn’t enough for the lenders to approve your loan. A lender will put a good amount of consideration if a suitable credit remark is presented in front of them. So, yes, it matters, and it has effects, in some instances, more than credit score.
Before understanding what affects a credit score or credit remark, let’s begin with what is credit score and credit remark?
What is a credit score?
A credit score is a three-digit number that analyzes your creditworthiness. You should have a good credit score to get interest rates for your loan. Have you monitored your credit score lately? If not, then you should see your credit score status, and you can do that by logging into Buddy Score, to get a detailed idea about your credit score. However, let’s understand how you can maintain a good credit score. There are specific actions that will impact your credit score and eventually affect your loan approval duration. If you have a good credit score or don’t, you should take conscious steps to build and maintain it. So now this article will talk about specific actions rather than impact and help you develop and improve your credit score.
- On Time Payment – An excellent financial activity can impact your credit score. Usually, the effect of loan repayment on credit history should be positive. So, paying payment dues on time every month becomes crucial in improving one’s credit score. That can be done monthly to improve one’s credit score. But on the other hand, late payments will hurt the score. Setting constant reminders or having a proper written record of the due dates will refrain you from missing the due dates and completing the payments on time.
- Less Presence Of Credit Card Balance – Having reduced credit card balances is one of the easiest and quickest ways to elevate one’s credit score. To do this, you also pay credit card dues on time. Using a credit card will assist in creating a credit history, and paying its dues on time will help with a good credit score. So, the less you have debts, the closer you are to your loan approval.
- Credit File Report Accuracy – A wrong or inaccurate credit score can influence your credit file. Hence, monitoring your credit reports is essential to ensure that accurate information is present on the file. If any discrepancies are detected, you can raise a dispute as soon as possible, as this inaccuracy might be a reason for a low score. After the debate is initiated, the report should be updated immediately under the lender’s knowledge.
- Enquiries – An investigation that shows how one has applied for credits. These hard inquiries can go on for 12 months which might impact your score for two years, but their impact on the score will disappear but might take time. Hence it would help if you kept checking their credit reports, which is regarded as a soft inquiry.
Following these points will help you build credit and improve it simultaneously. So, you might think about the benefit of having a good credit score, hence are some issues below.
- A good credit score can ensure a quick personal loan approval.
- It will help you get personal loan online at lower interest rates and more attractive credit card offers.
- You can get your lender’s trust and eventually have good stead with your lender.
- You will be more prone to getting a personal loan with less documentation and formalities.
- And, You can anticipate a longer loan repayment tenure if you have a good credit score.
Credit Score Table
|300 to 600||Very low|
|601 to 700||Low|
|701 to 760||Fair|
|761 to 800||Good|
After understanding the importance of credit score, let’s know what credit remarks are.
What is a Credit Remark?
A credit remark is a statement of an individual’s financial behavior and activities. Credit remark is based on your loan repayment and credit history. Some financial institutions might ask for more than an ideal credit score, and they might be asking for credit remarks. The lender is liable to reject the loan application if they see any negative credit remark on the credit report. To avail of a quick loan, you should have a good repayment history and favorable credit. Both credit score and credit remark can gauge your credibility.
Further, the article will discuss the specific Credit remarks to note.
Effects of credit remarks and what are the essential credit remarks.
Each credit remark has its effect on your credit report. So, the topic below is what are those credit remarks and the effect of credit remarks.
It can be difficult to make quick loan repayments as you might fail to repay your dues for almost 180 days. In that scenario, the status appears as “Written-Off .”Mostly this status is regarded as detrimental to your credit applications.
This remark appears on the report if you have partly paid the bills or prepaid a personal loan. Lenders usually consider this a negative comment, and the status is settled after settling. But this remark is regarded as harmful and creates hassles. As a result, you will face difficulties getting a loan application approved by the lender.
This remark appears after you have settled your outstanding debts after the “Written-Off” statement. Usually, it takes place after 180 days of non-payment of your pending loan dues. Also, your credit report might reflect this status if you have initiated a partial payment for this outstanding due. This credit remark significantly influences your credit status and can damage your credit status.
Hence, it would help if you avoided such remarks.
The remark is a default remark that will reflect on your credit report, indicating non – a payment loan of EMIs. The remark “willful default “intentionally makes the loan default despite having sufficient money to repay the loan amount. This remark appears when the borrower is not using the sanctioned loan amount, which is considered a willful defaulter.
It indicates that you have repaid your loan amount completely. Once you have closed your account, ensure the lender provides you with a closure letter or no dues certificate. This is a closure letter that reflects in your credit report as a no-due certificate.
How To Remove Your Credit Remarks Shown On The Credit Report?
It is very stressful for the borrowers to find a negative credit remark on their report. But here are points which will make you worry less about this problem. One of the best ways of working in credit is accessing credit reports from each bureau. The positive aspect of the credit report can be highlighted, and if any discrepancies are found, it is essential to report them to the credit rating agencies.
It would help if you never forgot to keep the supporting documents of wrong information and mention them along with the credit report. You can also avail yourself of a goodwill letter if credit remarks are genuine. It will help you furthermore if you make any further negotiations with the bureau by informing them that you might have gotten a salary hike. These easy ways should help you eradicate negative remarks from your credit report.
Now, also, let’s see what errors you can find in your credit report to raise a dispute if you want to achieve a suitable remark.
Common Errors To Anticipate In Your Credit Report
You can find errors in many instances, but you can be confused with the familiar name. Basic errors can occur while misspelling your name or providing incorrect contact details like an address and phone number, and you should strictly avoid these errors or no further hassle.
Errors Related To Your Account.
Account-related errors can be detected when you provide incorrect information about the status of your account.
Any inaccuracies missed and late payments will alarm you, and if no action is taken, especially from your side, you might get negative remarks. That will cause your credit rating to drop. And that can happen under this specific situation as well as mentioned below –
-Similar debt might have been listed more than once.
-When closed, accounts are mentioned as opened.
Fix your credit report error?
You should always have a copy of your credit report – As a customer, you are entitled to request a copy of our credit report once a year. It is easy for you to obtain your credit report copy online with online sources available.
Analyze your credit report to confirm errors:
Review and analyze your credit report. You should study and search for the mistakes in your credit score. Errors can be caused by personal information that cannot regularly affect your overall credit score but might provide you with alternatives.
Hence, this is how you should be aware of credit report errors, and these are the errors you should anticipate.
What Affects More Credit Score Or Credit Remarks?
As the article has provided you with different ideas about credit score and credit remark, it is crucial to know that both have an unignorable role. So, credit score matters in every situation, as credit remarks. A credit score is a numerical analysis of the financial credibility and ability of the borrower to repay.
Usually, lenders tend to check your credit score first before deciding your credibility position. And later, the lender might do a comparison study of credit score and credit remark to understand your credit better and further inquire into your financial situation while providing you a loan. If the lender wants to provide you with the terms and conditions of loan approval, then the lender will monitor the credit score first.
Hence, a credit score is essential, but it cannot be claimed as the only significant element as the lender uses credit remarks as your payback behavior.
The article provides scrutinized details about correctly understanding credit scores and credit remarks. Answering the title, credit remark, and credit score question is essential to getting a quick instant loan for financial coverage. And, if you are in an economic crunch, you can log in to the Buddy Loan app to get a quick instant loan at the best interest rate.
What are the main factors that decide one credit score?
- Good payment history
- Credit usage
- Length of credit history
Can credit remarks minimize your overall credit score?
The negative remark won’t lower your credit score but might affect the lender’s decision-making process.
Can you get a personal low credit score?
Yes, you can apply personal loan online with a low credit score, but the lender might ask you for a higher interest rate.
How many times can you check your credit report?
You can check your credit report once a year.
Can you check your credit score online?
Yes, you can check your credit reports online. You can also use Buddy Score to get an analyzed credit report.