1 week Ago By Personal Finance Desk
When you apply for a personal loan, one of the first things the lender looks at is your credit score. A personal loan is money you borrow from a bank, financial company or online lender.You can use it for many things like paying medical bills, funding a wedding, covering travel costs, renovating your home or even clearing other debts.
Unlike home or car loans, a personal loan is unsecured, meaning you don’t need to give any property as security.What's Credit Score? A credit score is a three-digit number that reflects your creditworthiness. Meaning: how likely you are to repay loans.
It ranges from 300 to 900, with higher scores indicating that you're a responsible borrower. A score above 750 is considered excellent, while anything below 600 might be seen as risky by lenders.When a lender gives you a personal loan, they are trusting you to repay it.
Your credit score helps them judge how risky or safe it is to lend you money.Top Five Personal Loan Offers With Best Interest Rates In 2025How To Check Your Credit Score It can be done in several ways:Free Credit Score Websites: There are many websites that offer free credit score checks. Visit the websites, create an account and you can view your score.
Bank And Financial Apps: Many banks and financial apps offer free credit score access. These apps often provide tips on improving your score too.Credit Card Companies: If you have a credit card, check if your provider, example HDFC Bank, American Express, offers free access to your score.
Requesting a Credit Report: You are entitled to a free credit report once a year from major credit bureaus like Cibil, Experian and Equifax. The report gives you a detailed look at your credit history, including any loans or credit cards you have.While the report is free, you might have to pay for your credit score.
Why Does Your Credit Score Matter?A good credit score (usually 750 and above) makes it easier for you to get the loan approved. A low score can mean your loan gets rejected or the lender asks for more documents or proof.If you have a strong credit score, lenders offer you lower interest rates.
But if your score is low, they may still give you a loan — but at a higher interest rate, making it costlier over time.Higher scores usually allow you to borrow a larger amount because lenders trust you more.How To Check Your Credit Score: A Step-By-Step Guide.
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