Credit score under 600? You could hurt these 3 hidden disadvantages more than you think

A creditworthiness of less than 600 is considered bad in India. Such a score can significantly influence your financial stability and prosperity. It goes without saying that low credit scores can lead to loan processes and complications.

Nevertheless, there are some other lesser known consequences of low credit scores that can disturb both personal and professional aspects of their lives. It has also been observed in the entire leading loan offices that the scores over 750 have a higher credit approval rate compared to lower loan scores. This underlines the difficulty of securing cheap loans, exclusive credit cards, etc. in a seamless way.

What are the disadvantages of creditworthiness under 600?

According to Raj Khosla, founder and MD, the Paramount factor for loans, advances and credit card instructions is undeniable. The most important disadvantages of a score among 600 include a higher examination, repeated rejection, restrictive access to credit, systems for higher interest rates, negligible scope of negotiations, etc. “, etc.” etc.

In addition to the obvious financial hurdles, there are three less known but effective consequences of maintaining a creditworthiness below 600:

1. Restricted access to credit facilities

People with loan scores under 600 are often refused to access basic credit cards such as credit cards, flexible personal loans or even overdraft facilities.

Due to the advent of artificial intelligence, almost all lenders are more careful due to borrowers with a low score due to increasing diseases in unsecured loans. It is therefore important to remember that without availability of loans there are difficulties to finance medical emergencies, business expansion and educational costs.

2. Higher interest rates and unfavorable loan conditions

Even in cases in which the creditworthiness is extended to borrowers with low creditworthiness, ie persons with less than 600 points, even in such cases the loan costs are much higher compared to people with higher credit values.

Now higher interest rates over time lead to larger EMIs and a higher financial burden. The situation becomes even more complicated if the income is unstable and unpredictable.

3 .. employment and housing problems

Although not widespread, low credit ratings can also affect their chances of securing a rental apartment or a reputable job in financial services. There are several employers, especially in BFSI sectors who check credit reports as part of the background review of the applicants.

In addition, the landlords in the U -Bahn cities such as Mumbai, Delhi, Bangalore etc. also begin to understand and analyze the applicant's financial discipline.

Therefore, these are the three important aspects that you always have to take into account if you apply for new credit cards such as credit cards, personal loans, etc. The reason why it is important is important that your creditworthiness becomes part of your character. It stays with them for years. It shows how consistent you are with your repayment and fulfillment of your financial obligations.

Disclaimer: MINT has a connection to FinTechs for providing loans; You have to pass on your information if you apply. These connections have no influence on our editorial content. This article only intends to sharpen and sharpen awareness of credit needs such as loans, credit cards and credit scores. MINT does not promote or promote loans because it goes hand in hand with a number of risks such as high interest rates, hidden fees, etc. We advise investors to discuss with certified experts before taking a credit.