Fly cash lender arrange with the credit reference agency to check your credit score to decide whether you can be provided with the loan. The credit score shows your financial history with all the information regarding the loans you have availed from different lenders. Credit checks actually establish your eligibility to avail loan options from different lenders. Yet there are several myths about credit score which provide the false impression to borrowers
Here are some myths and the realities about credit score for your reference:-
Myth-1: If you hold a bad credit score, it becomes very difficult to get a loan approved.
Reality: This is untrue and the fact is that many lending firms have exclusive loan options for the benefit of people with the poor credit score. However, the rates are higher than the rest of the loan options.
Myth-2: When you check your credit score, it will hurt your credit score.
Reality: Some of the borrowers are under the impression that when they check their credit score, it would affect their credit score badly. But the truth is your credit score will not be harmed in any way when you check it. If your lender checks your credit score, it will have a slight drop in the credit score.
Myth-3: If you close your credit cards, your credit score will improve.
Reality: There is a disbelieve that closing many of your credit cards will improve the credit score and holding many credit cards will have an ill effect on credit score.
It is not so and the factor to determine your credit score is your debit/credit ratio. Closing down your cards may change your ratio and your credit score would drop.
Myth-4: It is believed that a borrower’s income may affect his credit score.
Reality: This is totally a wrong belief and your income itself is not a factor affecting your credit score. Your ability to repay your bills may have some effect on your credit score.
Myth-5: Some of the customers believe that they have good credit without checking their credit records for a few years. They are under such a notion because the credit score would have been fine when they checked it four or five years ago.
Reality: Credit scores only affect an individual and your significant other’s credit cannot be considered as your credit score.
Vital Tips That Can Enhance Your Credit Score In A Quick Time
The credit score is a significant factor that affects your financial transactions. Many lenders check your credit score before they sanction you a loan option. Many employers also look into the candidate’s credit score for providing a job opportunity. Hence holding a good credit score would be always appreciated and every customer aims for it. To maintain a favourable credit score is based on your handling the payment of your bills with more care and responsibility.
- Pay Your Bills on Time:
Always aspire to pay your bills on time, without any delay. If you are unable to pay your bills on time, otherwise you may charge a late fee. Late payments of bills will also make the interest rates go higher and it will make your credit score to a dropdown. Delayed payments may lead to default and when you hold a default account, you will be denied loan option by most of the lenders. To set right your credit score will become too tough and so whenever you find it difficult to pay your bills, it is always a good idea to call your lender and discuss your problem with them. Some of the lenders are sure to help you out with some solution.
- Borrow Only what is Within Your Repayable Capacity:
When you apply for loans, the lenders may offer you an amount more than what you actually can payback. Do not get tempted to avail whatever amount is offered by the lenders. Instead, take time to calculate your repaying ability and procure only the necessary amount and this will save you a lot of trouble in repayment.
- Systemise Your Repayment:
Create an organized refunding pattern to pay all your bills promptly on time. Make sure all your bills are paid by the end of each month. You have to make a detailed study of the loan options, and start paying the bills with high interest first and then move on to the other bills with lesser interest rates.
- Begin with a Single Credit Card:
It is advisable to start with only one credit card for paying your bills or availing cash. Having too many credit cards at the same time will make things complicated especially if you are a beginner. Once you get used to utilizing the card without any hassles, you can start using more credit cards if you would like to.
- Avail Some other Form of Credit:
Having another kind of credit card helps you improve your score. So get an instant loan or installment loan or a personal loan. This will help you to have another card of a different kind. Do not close down an unused card and account for it may lower your credit score. Let the card age without any usage.