We are witnessing an unprecedented period of confusion. The livelihoods are damaged and economies slowed down due to the Covid-19 pandemic. The latest research has shown Experian, the world’s largest credit reporting service, that the number of customer demands for credit reporting in India soared 25 percent in June 2020 compared with May 2020. Those patterns make it very clear that the Indians continue to come to grips with the pandemic. They do want to create a positive credit score when pursuing contactless and digital banking options today to protect their financial future.
- Helps to get the best offer for personal credit
During such periods of reduced earnings, many plans to take a loan to handle an emergency efficiently such as a medical crisis or home damage, or to buy critical goods such as a laptop, air conditioner, water purifier, power backup, etc. Most of them now have or would like to promise collateral for the securitization of loans, such as household gold or insurance policies.
Nevertheless, only qualifying candidates with a decent credit score (generally over 750) are given the best personal deals. Therefore, a daily review of your credit report is very financially important should you intend to take an unsecured loan or a personal loan.
- Help get the best home borrowing
The Covid-19 crisis has forced RBI to cut the repo rate to add liquidity to the system which results in interest rates on home loans dropping to a level of sub-7%. Now it is also a cover for the potential homebuyers who don’t want to give up these low prices. However, even those with a good credit score will get the lowest possible rates for home loans. In return-linked home loan interest rates are calculated according to the credit profile of the borrower.
The smaller the debt, the higher the rate of interest spreads. Therefore, you would need to review your credit score in advance and raise it if it is less than 750 to get better loan rates, so you have the money to purchase a house without impacting your emergency fund. A high credit score can mean low-interest rates for home loans that will keep you high if you want to get debt-free sooner.
- Taking corrective steps to boost the credit score
The credit score should be reviewed periodically to see any downward trends due to our failures or even mistakes. If you have learned about your low credit score, you may take corrective steps, such as complete repayments of all dues in time, restricting your credit card spending to 30%, applying only for credit cards, and disclosing anomalies in your credit report that have reduced the credit score to your bank or credit disclosing agency.
To sum up, your credit score is similar to your regular medical checks to prevent further complications in the future. The habit of frequently reviewing your credit report these days, when external liquidity is more than ever required. And it should not be a challenge to review your credit report if you have free access to your credit report on several channels in minutes.