Whenever we hear the name of ‘Credit Score’ or ‘CIBIL Score’, only one thing comes to our mind – loan.
We think that if we have a good score, we will easily get a home loan, car loan or credit card, and if the score is bad, we will not get it. That’s the whole story.
But if you also think so, then you are living in a big misconception. In today’s digital era, your credit score is not just a measure of a loan, but it has become your ‘Financial Character Certificate’.
A bad credit score not only gets the loan application rejected, but can also cost you thousands of rupees in many other important aspects of your life.
Let’s know those 5 big places, where a bad credit score can become a problem for you.
Hurdle in Getting a Job
You may be surprised to hear this, but it is true. Nowadays, many companies, especially those in the banking, finance, insurance (BFSI) and fintech sectors, check the credit score of the candidate before hiring them.
Recently, Rajya Sabha MP Dr. John Brittas asked the Finance Ministry whether it has been made mandatory for candidates for banking jobs to maintain a minimum CIBIL score of 650 or more? In response to this, Minister of State for Finance Pankaj Chaudhary had said that this rule has been implemented to develop financial discipline in new employees.
Candidates appearing for the National Bank exam will have to show a healthy credit history at the time of joining.
If a candidate’s CIBIL record is not updated, he will have to take an NOC from the bank, otherwise the offer letter can also be cancelled.
The final decision in this regard will be in the hands of the concerned bank.
Why do you check?
Banks believe that a person who cannot manage his own finances responsibly (who has a poor score) will not be able to handle the company’s money or sensitive data. A poor score indicates your indiscipline and unreliability.
what is the effect
If two candidates are equally qualified, the company will always choose the candidate with a better credit score. A bad score can take away a good job that is in your hands.
Higher Insurance Premium
Your credit score can now also determine the premium of your car or health insurance.
What is the connection
Insurance companies are now using ‘credit-based insurance scores’. Research has shown that people with poor credit scores are more likely to make insurance claims.
what is the effect
If your score is poor, the insurance company considers you a ‘high-risk’ customer and charges you a higher premium.
On the other hand, a person with a good score gets the same insurance policy at a cheaper price. This difference can be of thousands of rupees.
Difficulty in Renting a House
This has now become a new trend in big cities. Landlords are now asking not only for your bank statement but also for your credit score.
Why do you check
Landlords want to make sure that their tenant is financially stable and will be able to pay rent on time every month. A poor score indicates to them that you may default on rent in the future.
what is the effect
If your score is bad, the landlord can refuse to give you the house or can ask for a higher security deposit from you.
Issues with Utility Connections
Do you want to get a new postpaid mobile connection or broadband installed at home? The service provider company may check your credit score before approving your application.
Why do you check
Companies want to see whether you keep a record of paying bills on time or not.
what is the effect
In case of a poor score, the company may either refuse to give you the connection or ask you to deposit a large amount as security deposit.
