How Important Is Credit Score For You

 

Credit ratings and scores are extremely important for all our financial commitments. A good credit score would not only help a person in acquiring a loan for his dire needs but also helps in having a higher credit card limit.

Yes, the trend today is to go cashless and most of us use either our debit or credit cards for shopping purposes.

We must have heard people talking and warning people about how dangerous or perilous is a credit card and that it might put you in troubles when not used properly. Of course, this is a fact but remember not all credit card holders have suffered this situation.

Credits need to be within limits. Here a question might arise as to how few credit cards are given more than the affordable limits? Generally, cards are not issued without scrutinizing the credit scores but if there is one then it should be from an agency which is in the market only to make people paupers.

So it is always safe to go for a credit card after securing a good credit score or go for one with a limit matching our scores for with such restricted limits we would stay secured.

Even with such liberties, people sometimes cross their limits and this is when they welcome problems for themselves. A credit card is one that helps us in a cashless purchase. The holder should always have an eye on the amount being spent and make sure that he does not cross the limits offered to him because the interest amount that he is paying for the limits offered to him would become double or even three times more for crossing the limits.


Credit score benefits

A good credit score, of course, helps in acquiring a credit card with a limit depending upon the ratings. A credit rating of 800 is considered a good score.

These scores would help a person in acquiring loans for any purpose. A credit score is a must demanded document by banks before granting loans to their customers. This credit rating would explain everything about the customer his credits so far, the interest payment and the repayment history etc… So based on their credibility the loans are granted to them, either for the full amount requested or a lesser amount based on the scores.

Another surprising benefit which many of us are unaware of is that a good credit score would help in securing a loan at a lower rate of interest. Yes, a person with a good score would actually be paying lesser interest amount than the one who has gone for the same loan amount with a poor credit score improve your rating.

Ways to improve credit scores

Improve your rating by following few important and simple tips and these are sure to help you get a good amount from the banks as loan and also for acquiring a credit card without any difficulty. Always keep an eye on what is the limit sanctioned to your credit card and the amount that you are spending.

Try to always keep it within the given limit so that you are always under the safe covers. This good credit card habit would help in securing a good credit score. Always retain records of your old debts, loans in the credit report. This is one way to create a good picture about your credit status. But unfortunately, many people do the mistake of removing the paid off and settled loans from their records which would actually help them in acquiring a new loan easily. So never remove or scrap the older records.

Be cautious of the number of applications for credit in a year. Always set-up a time period before going for a credit. The number of credit applications actually means that the person is in need of more credit and every time he applies for a credit, there is a dip in the credit scores which might actually hinder his loan process. So always be informed and plan your credits accordingly. These are some simple tips elaborating the precautions to be taken while going for a credit score. Following this meticulously would definitely help a person in securing the amount desired by him.