These 7 actions can adversely impact your credit score
credit score plays an important role in determining his/her creditworthiness. A lender, such as a bank or a non-banking finance company, will evaluate the credit score of a potential borrower to determine whether to lend to the individual. The credit score also impacts the amount of loan sanctioned and the interest rate payable on the loan by the borrower. What is more, if a borrower has a low credit score, the lender may reject the loan application.
These seven actions can have adverse implications on future borrowings.
Also read: Want to borrow money? Smart tips you need to know to get the best personal loan, home loan
Missed EMIs
If you miss your loan equated monthly instalment (EMI) payments, you are not only slapped with a penalty, but it also signals your inability to service a loan.
No loan history
If there is no active loan account or credit card, lenders have nothing to go by, i.e., you don't have a credit history they can base their decision of lending on.
Unused credit card
If you own a credit card but do not use it, lenders will not be able to know your repayment pattern. Are you up to date on your payments or do you delay your card bill payments — again, just like you not having a credit history can be a deterrent to getting a loan, not using your credit card can adversely impact your credit score.
Loan enquiries
Making too many loan inquiries makes you a risky proposition for borrowers. Multiple credit inquiries are looked down upon by lenders as it is considered a sign of high credit risk, impacting the chances of getting loan approval.
Too many cards and loans
Having too many unsecured loans and multiple credit cards, shows the borrower is prone to frivolous spending. «Credit cards stand as the
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