Having a good credit score can help you to maintain financial problems and can also aid in purchasing life’s most valuable assets. You could say that the credit score has become an integral part of everyone’s financial life. It can also lead the lender to decide whether they will approve your loan. Despite this, there are still a few things that people are not aware of credit score.
In this article, you will discover some interesting facts about the credit scores that you must know.
Here is The List of The Important Facts About Credit Score You Should Know:
Your degree doesn’t impact your credit score.
If you think your degree can impact your credit score, then you are totally wrong about it. Even if you have lots of degrees, your credit score will be the same as those who graduated from high school. Hence, your education level has nothing to do with your credit score because the credit score is determined by only a few factors, all of which are influenced by your debt and payments, but not your education.
CIBIL does not directly edit or delete information from your credit report
CIBIL generates credit reports based on the credit information that they receive from various credit sources such as banks and NBFCs. Therefore, they do not have the authority to delete or edit your credit information directly. They can update your credit report only when the concerned credit source authorize and provide the changes.
Each country has its credit scoring model.
It is commonly believed that India is the only country with a credit system. Our credit score system may be unique to us, but other countries have their ways to determine creditworthiness as well.
However, some countries have credit systems similar to each other. Although many countries have their methods for determining creditworthiness, they generally can’t track down your credit score.
Also Read : What Is A Credit Score, And Why Should We Check It Once A Year?
Employers cannot access your credit score.
There is a widely held misconception that employers can check your credit score to determine your suitability. The origin of this myth is likely because people mix up the terms “credit report” and “credit score.” It is only because the employers ask to see your credit report, but it’s usually a different version from the one you see and the one which are used solely for the employment screenings.
Your credit score may suffer if you close your credit cards
You must know that the history of your accounts is one of the most critical factors in determining your credit score. You should also know that closing your old accounts can negatively affect your credit score if you consider doing so.
Hence, the closing of credit cards reduces the space in your credit report, and a credit limit increase is a simple way to boost your credit score potentially.
Having multiple lines of credit will lower your credit score regardless of whether you pay back your loan on time.
In the event of multiple loans and credit cards that you apply for, the lenders will do a background check to determine your creditworthiness. If the lenders request your credit report, then it is known as a hard inquiry, which will harm your credit rating. Your CIBIL score gets damaged when creditors such as banks, credit card companies, and creditors inquire about your credit report from the credit bureaus.
So, if you apply for so many credit cards and lines of credit, then you will lose credit points even if you repay the loan on time.
Also Read: Credit Score vs CIBIL Score
You can’t edit or delete information on your credit report directly with CIBIL
To generate credit reports, CIBIL uses information that they receive from various credit sources, including banks and NBFCs. However, you cannot directly delete your credit information via CIBIL. CIBIL can update your credit report but only when the changes are authorized and provided by the concerned credit source.
You can check your CIBIL score as often as you like without harming your score.
Inquiries about credit score are soft inquiries, if only they are made directly to credit bureaus or by the authorised third parties. It does not matter how many times you make soft inquiries, It won’t impact your Credit score.
You can even check your credit score and credit report analysis from Buddy score in less than 1 min to know your current credit position.
Also Read : A Comprehensive Guide to Credit Score, How It Works And The Factors That Affect It!!
If you have a low credit score, it does not always mean you won’t get a loan
If you have a low CIBIL score, it doesn’t mean you won’t get a loan. There are various banks and financial institutions that offer loans even if you have a bad credit score. It is only because every bank has different credit score cut-offs as per different types of loans. Therefore, a low CIBIL score may get you some rejections from lenders, but it does not mean that you will not be given a loan at all.
You can apply for an instant personal loan from Buddy loan. It is one of the best loan aggregators that offer a loan at a low-interest rate even if you have a low credit score. Hence you don’t have to worry about your financial worries anymore.
You won’t have a bad credit score for the rest of your life.
If you think that your terrible credit score will stay forever with you, you are wrong about it. You will no longer see the most damaging information on your credit report after seven years, and it will affect your credit score less as time passes. However, your credit score may be negatively affected by late payment from last year instead of one five years ago. Therefore, you should keep these things in mind when you worry about your credit score.
Having no credit history guarantees that you will have an excellent CIBIL score.
There is a misconception that an individual with no credit history will have an excellent CIBIL score. However, in reality, a person who never had a credit card or took out any loans, whether it is an online personal loan or a home loan, will not be able to obtain a credit report or score from CIBIL. The same goes for other credit bureaus since they do not request your credit information from lenders to generate credit reports or calculate credit score.
Your CIBIL score remains even if you’ve never requested it.
Most people think that they will never have a credit or CIBIL score if they never ask for it. But in reality, it doesn’t happen the way they believe it to be or not how they think. Banks and other lenders are required to report to the credit bureaus all the credit information about their borrowers every month. Hence if you have a credit history, then you will have a credit score.
If you learn everything about credit score, then you will be in a better position to improve your score. If you want to avoid a negative impact on your credit score, you must keep your payment history on time, and must keep all the above-mentioned factors in your mind.
However, in the long run, a higher credit score could help you to save a lot of money. You must also try to learn all the ins and outs of credit score and for that you can take an assistance from the experts like Buddy Loan who provide financial and banking advice and can help you to make your life easier.