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Ways In Which Your Credit Score Impacts Your Life

Adhil Shetty

Your Credit Score is a function of your credit repayment history. In this article, we’ll discuss the importance of a good Credit Score.

Ways In Which Your Credit Score Impacts Your Life

Your Credit Score is a three-digit summary of your credit history. It is a function of your credit repayment behaviour. The credit bureaus get your loan and Credit Card repayment history from banks and evaluate it to give you a Credit Score. Your score, along with the factors that have helped determine it, are compiled together in your credit report.

Do keep in mind that a CIR does not contain details of your savings, investments or Fixed Deposits.

The most important factor in your credit report is your repayment history. It has an impact of about 30% to 35% on your Credit Score.  So if you want to have a good Credit score, you must pay all your dues (loans EMIs and outstanding Credit Card dues) in full and on time.

The importance of a good Credit Score can be gauged from the fact that it affects your financial life in many ways. Some of them are listed here:


Whether it is a Home Loan, Car Loan, Business Loan, or a Personal Loan, most individuals will opt for a loan at some point in their life.

A good Credit Score helps you in securing a loan easily.  Whenever you apply for a loan the first thing bank check is your Credit Score. Chances are high that the loan application of a person with a bad Credit Scores may get rejected. So Credit Score affects your borrowings capabilities.


Don’t be surprised! These days many companies are checking the CIBIL scores of their prospective candidates. This is a well established global practice, which is slowly gaining ground in India too.

It is very logical as well. After all, a bad Credit Score suggests that the person has an irresponsible lifestyle or one who is not serious about money or future finances.

These are the traits which an employer may not prefer to have in a prospective employee. It could also mean high debts which could affect the candidate’s performance in the office. Some organisations check Credit Score only for a few roles or posts. However, others check this score for all levels of employment.

Going Abroad For Study Or Jobs

Even though your Credit Score does not affect your chances of securing a visa, but banks in other countries do consider Credit Scores from your origin country before they issue you any Credit Card or loan there. This is especially true of US and UK. So, a low score may prove to be troublesome for you there.

Cost Of Loan

When you want to take a loan from any financial institution the first thing you want to know is the interest rate. Even a slight dip in the rate makes a huge impact on the total amount to be repaid.

If you have a good Credit Score there are chances that you will have to pay a lower rate of interest on your loan. A good Credit Score also gives you a chance to negotiate the rate being in a relatively stronger position.

Higher Limits

Banks and financial institutions favourably view individuals with a good or a high Credit score. It means that you will get approval for higher limits from the bank or financial institutions for any kind of loan applied for.

Emergencies, whether financial or medical or any other kind come unannounced, and one of the major tools needed to overcome these emergencies is money or credit worthiness. A good Credit Score is always a blessing in such scenarios as it helps you to get credit much easily, enabling you to concentrate on the other aspects of the emergency.

BankBazaar is a leading online marketplace in India that helps consumers compare and apply for Credit Card, Personal Loan, Home Loan, Car Loan and insurance.


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