You must always pay your dues on time!
This and many other advices have been passed on by parents to children as they grow up. These advices are more clearly defined as common sense to improve your financial profile. One main highlight of this is its importance in improving your credit score. Paying your credit card bills and loan EMI’s are really important in many ways.
We shall explain this concept to you with an example;
Mr. Amit Kumar, a middle aged man has been working in the corporate industry from the past 10 years. He has an active credit card from the past 10 years. He also has taken 3 instant personal loan during this period and has repaid all of them. He now intends to search a house and take a best home loan within 2 years. But when his credit report is generated, he realizes that his score has declined in the past 3 years. With such a low credit score, he won’t get a good deal from the bank and the interest rate offered to him would be higher than others.
What should Amit Kumar do to improve his credit score?
He must pay all his dues on time!
Did you know that whenever you default on any payment like credit card bills and also loan EMI’s it reduces your credit score. This is not a healthy practice. For your credit score to decrease, it is very easy. But for it to increase, it will take a lot of time.
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Yes, when you pay your credit card bills on time it affects your credit score in a positive way. The same can be said about loan EMI’s. If you keep up with timely payments, you will see an improvement in your credit score within 12 months. Once your credit score improves, you can opt for a home loan or any other loan like loan against property/mortgage loan, used car loan, instant personal loan etc and get a good rate from the bank.
We highly advise to all our customers that it is very important to pay all your credit dues on time. This is because banks prefer to give loans to trustworthy people. According to the bank, a trustworthy person pays his bills and EMI’s on time and has a good credit score.
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You need to remember that whenever you default on a loan, you will be charged late payment fees. Hence following such practices will affect your financial profile. Be cautious with your bills and always maintain a good credit score. If you have any personal loan based queries