Why Ignoring Your Credit Score Can Cost You Money?

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credit scores

A credit score is one of lending institutions' most crucial parameters to determine an applicant's eligibility. A high score means consistent repayment history and responsible credit behavior. As a result, NBFCs sanction bigger loans at lower interest rates to high-score individuals. 

Ignoring the credit score can cost money, as those with low credit scores end up paying a higher interest rate. A higher interest rate eventually leads to bigger EMIs and more considerable interest outgo, increasing the total loan cost by the term-end. 


Moreover, NBFCs approve their loans for shorter repayment terms due to the higher risk involved. As a result, their EMIs are bigger, making them less manageable. Consequently, they struggle to pay their EMIs consistently, leading to more late payment charges and penalties. Therefore, improving the credit score is essential to get the best interest rate and save money.

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