In the present time car has become necessary for every individual, rather be a salaried person or a businessman. Every individual wish to provide an easy mean of transportation for his family. Earlier it was quite tough for every individual to get a car, but now a days due to easy financing options provided by financial companies have made it easy for the individuals to get their vehicle easily.
But can a car loan be rejected? Does an individual have low credit score affect his decision to get a car loan?
Yes, even a car loan can be rejected. Mr. Basu, a salaried individual applied for a car loan and it got rejected.
Mr. Basu was an IT professional. Being an IT professional had a decent salary. As he had taken a home loan which was currently continued, could not get a car by full payment. So he applied for a car loan. Looking at his salary, it was easy for Mr. Basu to get approved for a car loan. But he was shocked to know that the financial institutions had rejected his loan.
But even after having a decent salary, why was the loan application of Mr. Basu rejected. The reason behind denial of loan stated by the financial institutions was “Credit score of Mr. Basu was low, due to which the loan application was being denied.”
Credit Score? Mr. Basu had never heard of such word. But can this credit score be the reason for denial of a loan?
Credit score is basically a three digit numerical figure which ranges from 300 to 900. This score is generally rates an individual as per his credit history. Generally a credit score of 700 and above is considered as a good score.
Credit history is the snapshot of past and current credit relationship of an individual. It states whether the individual has been consistent in making all his payments. Credit history nowadays has become an important part of finance. But people are not much responsible as they should be which can make their credit history poor.
These credit scores and credit history of an individual are calculated by credit bureaus. The banks and the financial institutions provide all the information of every individual to these bureaus to check their creditworthiness. The major credit bureaus in India are CIBIL, Experian, Equifax and High Mark. Every bureau has a different method of calculating their score. Based on the score calculated by the bureaus, banks and other financial institutions check the creditworthiness of individual.
After knowing everything about credit score and credit history, Mr. Basu felt that all these are very important aspects of finance for every individual.
Mr. Basu realised the truth that individuals with bad score and poor history would face rejection in their each financial attempt. Banks and financial institution will be able to provide financial help to such individuals. As these individuals will gain trust of these institutions as their history is poor.
Now where there are many individuals who have low credit score and poor credit history, these people need someone who can assist them to get out of such situation and improve their finances. Credit repair companies are those institutions are those companies whose aim is to help all the people to restore their finances.
Credit Sudhaar is India’s first Credit Health management & improvement company whose goal is to help clients to Restore, Enhance and Protect their Credit and make them credit healthy.
Courtesy : Yahoo