Your Credit Score acts as a guarantee of loan repayment for sure, but how does a loan affect your credit score?
● When you apply for a loan an inquiry is raised to know your credit score
● All such inquiries raised, are recorded in your credit report
● This may have a positive or a negative impact, depending on your credit history.
Note: Multiple inquiries have a negative impact on your credit score.
2) Regular Payment
● Your repayment schedule is recorded by credit bureaus
● If your EMI is not paid regularly, it has a negative effect on your credit score
● When your EMI is paid regularly, your credit score increases.
● A high credit score is equivalent to high financial credibility
● This helps you receive fast approvals on your business loan applications
4) Better Interest Rates
● Your financial credibility determines the RoI for your loan
● When your credit score is high, your RoI is low and vice-versa
Maintaining a high credit score is always beneficial for any businessman. It paves the way towards a journey of growth and expansion.