An individual’s credit score represents his creditworthiness. It is one of the most important factors that banks consider when somebody applies for any kind of loan or credit card.
Difficulty in availing best loan offers:
If your credit score is zero, it means you do not have a credit history. With no credit history, banks have no data to assess your repayment behaviour and you will be profiled as a ‘risky’ prospect.
Interest rates will be higher:
Following the general trend in advanced economies, Indian lenders are also on their way to factor in credit scores for setting interest rates.
No pre-approved loan and credit card offer:
Many banks offer pre-approved loans and credit cards offers on the basis of your credit score. These offers are usually customised and have a much lower processing time than conventional loans. The absence of credit history will deprive you of availing such offers.
Approval of premium credit cards will be difficult:
Credit cards have become an important financial tool today. Apart from providing you easy credit, they also come with attractive reward points program, discounts/cashback offers and EMI offers on credit card purchases.