Over Usage of Credits May Lead to Disapproval of Loan

By siliconindia   |   Monday, June 29, 2015
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BENGALURU: People use credit cards more than printed money to buy all sorts of things but credit card users are unaware of the fact that if their credit score is below 900 then they won’t be eligible for any new loan unless they repay the credit to the banks. Banks and credit card issuers have started scrutinizing customers and their repayment pattern with a fine tooth-comb while processing loan applications, according to Hindustan times.

Always remember that banks do not approve your loan request unless you have repaid your credit, even if it’s just mere Rs.100. Your chances of getting a loan are very slim if you have a past history of non-payment of your credits. Now lenders are collecting your track record of your credit card transactions and repayments of your credits, so that they can approve or disapprove your loan.

The ‘score’, here is a three-digit number ranging between 300 to 900 which helps the banks in estimating whether the customer is regular in the repayment of his credits as well as the over usage of his credits which are yet to be paid. Earlier only banks were able to track their customer’s record but now any lenders are able to access or track your record for repayments of credit.

This process is called as a 360 degree dynamic credit-worthiness. Consumers can purchase their credit scores directly from firms such as Credit Information Bureau of India Limited (CIBIL) if they are a new customer. The non-repayment of credits may also force banks to lower your credit card limit and also minimize the amount of your loan that you have applied for. These are the strategies followed by the banks who lend credit cards to their customers.

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