Today, millennials, also known as Gen Y, make up majority of the workforce in most countries, including India. Unabashed about their aspirational lifestyle choices, millennials are creating new trends in consumer behaviour. Additionally, with most being on the threshold of achieving life goals such as starting a family and buying a home, the financial circumstances of this generation are more important than ever before – to themselves as well as to the health of the economy. If you are a millennial looking to apply for a credit card or take out a loan, you must have a good credit score. Wondering how a mere number can determine your standing in the eyes of banks & credit institutions? Well, here’s everything you need to know about credit score and why it matters.
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What is Credit Score?
Simply speaking, a credit score is a three-digit numerical representation that indicates your creditworthiness. Ranging between 300 and 900, a credit score is based on personal financial data such as payment history, types of credit used, and amount of debt to be repaid among others. Typically, a score of more than 650 is considered fair, more than 700 is deemed “good” and, more than 750 is regarded as excellent.
In a nutshell, lenders use your credit score to evaluate your potential to repay loans on time.
Why Does Credit Score Matter?
- A higher credit score improves your eligibility for securing loans and credit cards.
- With a good credit score, you could be offered a higher loan amount at a lower interest rate. Likewise, you could get the best credit cards, such as those with a higher credit limit, better rewards and benefits, and a lower interest rate.
- Thanks to a high credit score, you could enjoy pre-approved loan offers. This means your loan application would get instant approval with zero waiting period.
- When travelling abroad, having a high credit score could add weight to your visa application.
- Having a favourable credit history will help you whenever you wish to apply for any credit product, be it a credit card, personal loan, car loan, or home loan.
A dynamic credit score can always rise or plummet based on new financial information. You can improve your credit score by paying your bills on time, not defaulting on any existing loans, and maintaining a low credit utilization rate. Avoid closing a credit card account as doing so could hurt your credit score. Also, avoid making multiple credit inquiries or applying for multiple loans at the same time lest you should appear credit-hungry. This could harm your credit score.
Last Few Words
Are you looking to apply for credit cards? Look no further than Indus Easy Credit Cards by IndusInd Bank. You may take your pick from different instant credit cards, each packed with rewards and advantages to suit your lifestyle needs. Additionally, with a simple and seamless 3-step digital application process, Indus Easy Credit Cards are super-easy to procure. So, get your Indus Easy Credit Card today!