Credit Score Management :
The corona virus pandemic has affected the economy and left many out jobs which is going to have it’s effect on credit score for the ones having hard times to pay off the liabilities. Well, without a tension, the credit score can be improved. The fair credit scores are between 580 and 669. A low credit score may create huge problems to the customer. Here, we provide various options that will be pivoting my reader’s financial outlook.
Late or no payment may have a negative effect on a person’s credit score. In the words of Naveen Kulkreja, Chief Executive Officer and Co-founder of Paisabazaar.com, “Non-payment of EMIs would not just impact one’s credit score, but also hurt his/her ability to borrow in the near to medium term”. After the income levels are re gained, then also, people may not be able to achieve goals just because, they cannot take up loans.
Any one of us may get trapped in a debt-like phase. The interest rates add more trouble to the burden of debt. So, to maintain a good credit score, the best is to pay off the debt. In the words of Rohit Garg (co-founder and CEO of SmartCoin), “With current uncertain times, you never know when you might require cash urgently. High balances and/or late payments on credit card accounts can hurt your credit rating and you might face difficulties when you need to apply for a loan.”
One needs to strike a perfect balance in between the granted secured and unsecured loans to be a good credit scorer. In the words of Vineet Patawari, CEO and Co-founder, StockEdge & Elearnmarkets, “ Unsecured loans like personal loans, credit card dues, etc. come with a higher interest rate and should be paid off as soon as possible. The government has announced EMI moratorium during the COVID period, but in a normal situation the schedule of secured loans like home loan and car loan should not be disturbed as it carries the risk of the backed asset being seized by the lender.”
A person must ask for loan only when needed and not always seek inquiries regarding loans. In accordance to Raj Khosla, founder and managing director, MyMoneyMantra, “Multiple loans and credit card inquiries can hurt credit score. Thus, you should never initiate multiple simultaneous credit queries. For a good CIBIL score, always ensure optimal credit utilization, a right credit mix of secured and unsecured loans and repayment regularities.”
The consolidation of debt helps to get granted a new loan in order to pay back other debts or liabilities. The RBI in the month of October dated 27 in this year have made it clear to all financial institutions to abandon the interest on loans till Rs. 2 crores for the 6 months’ moratorium programme since 1st March, 2020. Therefore, it won’t affect anyone’s credit score if s/he cannot pay the loan now and move for the option of loan moratorium.
Thus, we just need to be precise about our financial programmes to maintain a good credit score. This was all in this article. Hope to have helped you. Do not forget to give a comment in that box. Thank you!