These Behaviors Decrease Your Credit Rating

<p>Your credit score is the only consideration that determines whether a bank or financing firm will approve your loan application or not. A credit score is a measure used by banks and financial organizations to assess your reputation for repaying loans.</p>
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<p>Banks and non-banking finance organizations assess your credit score when you apply for any kind of loan before determining the loan amount and interest rate.</p>
<p>Your chances of obtaining a large loan amount at a reduced interest rate are higher if your credit score is high. If you do, however, have a poor credit score, your odds of being approved for a loan are slim, and even if you do, the interest rate will be higher.</p>
<p>The items listed below will reduce your credit score.</p>
<p>Not only will you be penalized for missing your loan EMI payments, but it also shows that you are unable to repay the loan.</p>
<p>no prior loan history</p>
<p>Banks and businesses cannot determine your credit score if you do not have an open credit card account or loan. You don’t have any credit history that lenders or other businesses may use to determine whether to provide you credit.</p>
<p>Banks won’t be able to track your loan repayment history if you don’t have any credit cards or if you’ve never made a loan repayment. Your credit score may suffer if you do not use credit cards.</p>
<p>Overwhelming Loan Requests</p>
<p>Lenders see you as a hazardous candidate if you ask too many questions regarding the loan. Your prospects of obtaining a loan are negatively impacted if you submit several loan queries since lenders see this as an indication of high credit risk.</p>
<p>Many credit cards and unsecured loans are seen as indicators of excessive consumer expenditure. Having many credit cards comes with the responsibility of making monthly payments on each one. Late payments or payment defaults lower your credit score.</p>
<p>Utilizing the EMI option after credit card purchases</p>
<p>When credit card payments are made in installments, it means that you have spent more than you can afford to pay back.</p>
<p>Negotiation of Loan Settlement</p>
<p>In addition to the principal amount, the loan borrower is also responsible for paying interest and additional fees levied by the lender. The borrower has the major obligation to make timely repayments, while the lender retains the right to obtain full repayment.</p>