A lot of things are taken care of before giving a loan to any customer. Banks or financial institutions ensure a lot of information by giving loans. So that somehow the ability of the customer to repay the debt can be understood. It is also known whether the customer will be able to repay the loan with interest payable. Credit score is seen while giving loan. This measure gives every information related to the credit history of the customer, his bank and loan accounts, repayment track record, and total loan level.
Talking about the credit score, it should be between 300 and 900. A good credit score is between 550 and 700 and a very good credit score ranges from 700 to 900. A person can increase good credit habits. We are telling you how you can increase your credit score.
Create a good credit score: The customer should create a good credit history, showing different types of credit, short term or long term secured track so that the customer can repay the loan in future.
Credit Discipline: It is important to build discipline in relation to the repayment of credit. EMI and credit card dues must be paid before the due date. Creating reminders or setting up auto-debit instructions works well to maintain this discipline.
Joint accounts: Where the customer is a joint holder, it is important to monitor the repayments made for the loan. The customer is equally responsible for making EMI payments on the joint loan and has a direct impact on the credit score. The same principle applies to loans guaranteed by the customer.