All you millennials out there, when it comes to taking care of our finances, it is usually a tricky task. We are more of a spend-than-save generation, hence, whenever we talk about money, it doesn’t quite go down well. Once you have warmed up to the importance of Financial Health and how to maintain it well, you should start focusing on your credit score.

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A credit score is a simple number that tells lenders how likely you are to repay a loan. This score takes into account your credit history and helps a lender make a decision. If you apply for a home loan, business loan, student loan, car loan or even a line of credit, the bank would use your credit score as a deciding factor.
The score ranges from 300-900, with 300 being the lowest and 900 highest. Higher the credit score, the better interest you fetch from the lender. The average credit score in India lies between 640-690, which is good. Credit bureaus like CIBIL, Highmark, Equifax and Experian give credit scores. In general, people try and maintain a score of 700+ to be on the safe side.



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We cannot stress enough on how important maintaining that credit score is, it can practically take over your financial life. If you want a life on the rocks, save yourself from hitting the rock and start building your ‘CREDIT SCORE’. If not dealt properly, here are a few things it can cause:

    1. Loan disapproval: A bad credit score can straight lead to disapproval of a loan, no questions asked. A lender would never give you money if your score does not reflect your worthiness to pay it back. Even if you are approved for one, the interest rate you will be charged for it will be very high!


    1. Higher Insurance Premiums: If you have a low CIBIL score or credit score, chances are your insurance premium would be much higher than others.


    1. You dream home would still be a dream: Home loans are a huge deal and involve a lot, a LOT of money. You really think a bank would give you all that money with a score, of say 400? Think again.


    1. It can hinder your payments: When you have a consistent low credit score and do not make your payments on time, the bank reduces your credit limit.


    1. It can affect your job aspirations: Nowadays, employers also check the potential employee’s credit score as it determines his worthiness and to reduce any probability of theft of embezzlement.


Though a poor credit score can hurt you, maintaining a good score is not that difficult after all. Check out our other articles for a self-curated list of things you can do to improve your score. If you still need some help to understand it, let KAL PENN help you!

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