If you are someone who has recently stepped into the real world and like anybody else have been baffled by what adulthood is and how to go about it. The first and foremost piece of advice anyone would give you would be to take charge and manage your finances. This would be rightly so. The biggest part of managing your finances is managing your credit. Before we dig deep into what credit is, why you need to do all things possible to maintain it and how can you get a good credit score, with this article, let us understand what happens if you have a bad credit. A bad credit leads to you not being eligible for very many loans. You can do quick searches on the internet using keywords like bad credit loans guaranteed approval. However, they would all just lead down to a rabbit hole of highly impractical steps. This is why it is always advised to maintain a decent credit score from the very beginning.
What is credit score and how can you maintain it to what is considered a good level?
When put in simple terms, credit like the name suggests refers to the predetermined ability of an individual to pay back his/her loans if he/she ever decides to take one out. Credit is not determined by how well the loans have been paid in past, although this does play a major factor in it. A good Credit score is not made up of a single big act of financial commitment but rather a sea of small acts. One can maintain a desirable credit score, by simply paying their bills on time. They must ensure that their bank accounts always have the minimum balance in them, and if it ever runs low, that the bank overdraft fee is not left unpaid for long. What would considered to be a good credit score varies from place to place. In India, a credit score above 650 is said to be amazing and can usually get you quick and easy approvals for loan.
It is not that one cannot secure a loan, without credit. They most certainly can. However, a good credit score helps you a lot by lowering the interest rate charged on the loan. It also might get you easy repayment plans, custom to your comfort. The beginning of a credit score begins from a young age and that is why young adults are always advised to be cautious with their finances.
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