How to check Credit Score & how to get loans with low Credit Score?

“Isn't it sad that we have to gain control of the artificial numbers placed upon us by others to regain some control of our lives?”

This quote by Rick Gregory tells a lot about the situations we often face in managing our finances. More specifically, while obtaining loans. Can you guess what we’re referring to? Well, Credit Scores.

Obtaining loans has been a cumbersome process since time immemorial. From documentation to regular branch visits, it’s in no way a cakewalk. Besides, no person/institution will lend you for nothing. They’ll obviously ensure the safety of the money lent and interest accrued. They’ll want to know beforehand whether you’ll be able to repay it in time or not. They’ll want to see how your past credibility track record has been & whether you have been paying installments in time. But how?

Enter - Credit Scores. Let’s understand the concept of Credit Scores and figure out how you can obtain loans even with a low score. Hop in!

What is a Credit Score?

A credit score refers to a score that determines an individual’s creditworthiness. What does this mean? In simple words, a bank or any non-banking financial corporation (NBFC) that usually lends various kinds of loans does a series of verification to check if the individual can repay the lent amount in the future without any default. One such element that determines this ability is the “Credit score”. It is a three-digit number that usually varies between 300-900, the lowest being 300.

Various organizations procure, store, and update an individual’s credit activities. Using this information, the individual is rated and given a score, which depends on various factors. These include credit history length, payment history, the total amount due, and types of credit taken. Based on these factors, every individual is given a score, which the lender later uses to determine if credit has to be provided to them or not.

Importance of a Good Credit Score

Different organizations use various ranges to rank the customers as having a good, fair, or bad credit score. A score above 650 is considered to be good in general usage, and a score below 550, bad.

A good score would mean that the risk of default is low and that the customer has a soundtrack of repayment and credit maintenance, in which case they are provided with benefits that the others are devoid of. A good credit score may enable you to get quick loan approval, providing you with the best credit card that’s available in the market. You may also be able to procure loans at a lower interest rate and cut out on the processing and other fees charged.

How to Check Your Credit Score?

Now that you know how important a good credit score is, you must realize that improving the score is crucial. And for this, you’ll obviously need to know your score first. How, you ask?

You can find several tools over the web that can help you check Credit score. But the problem is that most of them are pretty complicated and above the understanding spectrum of a layman. So, then?

Well, the most hassle-free and easiest way is Fit Credit, an absolutely free application that calculates your credit score (CRIF score) and provides you with a detailed report within 30 seconds. Yes, you heard it right.. in just a matter of seconds!

Not just this, Fit Credit also has several other awesome features. Once the report is generated, the app also helps the user find gaps and suggest ways to fix them.

How to Improve Your Credit Score?

The credit score is revised and updated in regular intervals. It is prone to fluctuations which also means that there’s definitely a scope for improvement. There are certain ways in which one can improve their credit score:

• Pay the outstanding balances on time and in full, everytime.

• Not having a credit card does not mean a better score. For first-timers, one can get a credit card against a fixed deposit or gold.

• Refrain from spending mindlessly.

• Do not apply for multiple loans or credit cards in a short span of time.

• If you require multiple credit cards, do not hold a single type. Ensure to have a proper mix of loans and credit cards.

If following these steps seems like a hassle, you can always turn to Fit Credit. It not only suggests ways to improve your credit score but also provides you with a feature to set payment reminders which would ensure that your payments are not delayed. You can also store your financial documents safely using their FinFiles feature.

How to get Loans even with a Low Credit Score?

Improving your credit scores takes anywhere between six months to one year. Does this mean someone having a low score cannot avail credit at all? Absolutely not!

Whenever there is a need for immediate fund arrangement, look no further than Asia’s first credit line, MoneyTap. It is an application-based credit line collaborated with reputed banks like RBL bank and other NBFCs to approve and provide a personal loan up to Rs.5 lakhs. With just a tap, you can avail of personal loans that can be utilized for various purposes like traveling, home renovation, education, etc. The rate of interest charged is as low as 13%, and also pay interest only on the amount you’ve utilized! So, a deal you can't refuse, eh?

The Bottom Line

A good credit score not only helps in quickening the process of availing credit but has other implications. Sometimes, an employer might want to quickly look into a prospective employee’s credit score before recruiting them. It is an indicator of how well the person manages his finances.

It is always wise to improve your credit score and keep it updated while there is still time to avoid the last-minute rush in times of emergency or liquidity crunch cases.

Financial management ain’t a luxury; it’s a necessity. Period.