Almost every urban city-dwelling individual, and especially millennials, have a credit score assigned to them by credit bureaus such as CIBIL if they have used a credit card or have taken a loan from a financial institution. A credit report is indicative of a few things, such as the likes of a borrower’s creditworthiness, attitude towards credit advanced by a lending institution and their ability to manage their finances after accommodating the payments that they need to make towards their credit obligations, amongst others.
This is one of the reasons why credit-conscious millennials tend to check CIBIL score concerning them online very frequently. Additionally, some of the other reasons that the credit-conscious millennials tend to check CIBIL scores often is because they are statistically on the verge of making some big decisions in their lives. Some of those decisions can be found below.
Reasons Why Millennials Tend to Check CIBIL Scores Frequently:
1.Marriage: A marriage can be an expensive affair, and it could require a millenial to take out a marriage loan every now and then to meet the costs. Given the loan amounts that are taken out for marriages is fairly substantial, a millennial would be required to keep a check on CIBIL score and reports regarding them and make sure that it is a healthy one, as it will be counted as a proof of credit-worthiness by the lending institutions
2.High indulgence purchases: A significant percentage of millennials are at an age group where they would like to own a vehicle such as a two or a four wheeler of their own. Given that a decent vehicle can cost several lakhs, millennials tend to seek the financial institutions’ help regarding the funding requirements of the same. Such a move is widely considered as a smart decision by many.
3.Education: It can be safely said that some of the millennials have already embraced parenthood. As is known to everybody, with parenthood comes the various responsibilities attached to raising a human being, one of which pertains to the child’s education. Childrens’ education is one of the most common reasons why parents tend to reach out to a bank or a financial institution, who they expect to take care of a significant portion of their child’s tuition fees through a loan amount. Hence, a parent who is looking to get their child educated with the help of a loan will frequently check CIBIL score and reports pertaining to them and/or their spouse.
4.Purchase of a house: It is fairly common for an individual in their 20s or 30s to dream of a house of their own. Some of the people who belong to that age group actually even end up taking steps towards it by applying for a Home Loan, which generally amounts to several lakhs, and, in some cases, a few crores. Given the sheer size of the Home Loan that the millennial expects from the lender, it is important for them to check CIBIL scores pertaining to them frequently as the lender considers the same to be an indication of their creditworthiness.
5.Starting a business: A millennial who has spent a sizable amount of years in the field of their choice may one day decide to start an organisation of their own. As is common knowledge, a business, in addition to a substantial amount of mental and emotional stability, also requires a hefty sum of money to get the business going and eventually turn it into a profitable venture. This is where a bank and the kind of business loans that they offer aspiring entrepreneurs comes in. Business Loans are generally approved based on the documents related to the establishment, but, much like in the case of other forms of loans, the borrower’s credit score at the time of them applying does play a factor.
How can I maintain a Healthy Credit Score?
You can ensure that your credit score is a positive reflection of your financial management skills through various methods. What you will find below is a list of some of the things that you can do to achieve the same. Read on to know more.
1.Pay your loans on time: If you maintain financial discipline by making timely payments of your outstanding credit dues, it will positively affect your credit score in a major way.
2.Check CIBIL score frequently:If you check CIBIL scores pertaining to you frequently, it will be an indication of conscientious credit behavior, as such enquiries are generally recorded by the credit agencies as and when they are made. Additionally, timely screening of your credit report will help you spot discrepancies, if any. If you do find an anomaly in your credit reports, it is recommended that you raise a dispute regarding the same as soon as possible.
3.Have a healthy mix of secured and unsecured loans: It is important for a borrower to ensure that you have a mix of both secured and collateral-free loans as a part of your borrowing history. In the mind of the lender, this will also translate to an indication of creditworthiness. Hence, it is important for you to check CIBIL scores pertaining to you frequently and ensure that a healthy ratio is maintained