A credit score is one term that has been making all the right noises in the banking sector for the past few years. Its role and impotence have gradually been spiking up, with credit score being a key factor in evaluating a loan or credit card applicant's credibility and also being one of the basis for finalizing lending rates by financial institutions.
But that’s not all.
Many employers in various sectors and industries of India have now even started considering credit score criteria while evaluating job applicants. This is another aspect besides the others mentioned about credit score, to keep in mind when applying for Axis Bank Personal loan, as failure to qualify for any criteria can result in loan rejection.
Let's deep dive a bit and understand this entire concept.
Your credit score is a 3-digit number computed by credit bureaus, numerically summarizing your credit behaviour. It is a reflection of how well you have been handling your debt repayments. Indisciplined credit behaviour would be indicative through a low credit score, whereas timely repayments and responsible behaviour would build up a strong credit score. When you submit an application for an Axis Bank Personal loan, a low or nil credit score can lead to rejection of the application, or you may even be charged a higher interest rate if the loan is approved.
The idea behind employers considering job applicants' credit scores while evaluating their application is to adjudge the financial health of the candidate, to evaluate other personal attributes such as reliability, sustainability, honesty, along with the likelihood of indiscipline, unethical behaviour or even possible fraud in future. This practice would enable organizations in making quick and consistent decisions based on financial behaviour reflected through credit checks.
Job applicants shouldn't consider credit scores as a deterrent in getting a new job. Practising disciplined credit behaviour can even land you your dream job, especially if your credit score is better/higher than other candidates.
And that's not all.
With currently four different credit bureaus in our country, specifying a particular credit score as a high or low won't be possible due to varying credit scoring parameters of each bureau. While hiring candidates, the minimum score benchmarked by them, if any, would depend upon the credit bureau opted by the organization and the set HR policies regarding the role of credit checks in doing so.
The inclusion of credit screening into the hiring process would certainly assist the employers in identifying and removing financially stressed candidates and mitigate the potential risks posed to an organization upon hiring such candidates.
Also, personal loan borrowers who are planning for Axis Bank Personal Loan Preclosure should also maintain a high credit score; otherwise, their request for pre-closure may be rejected, or they may face difficulty in the process. Having a low credit score is viewed negatively by your lender too, so they may ask for the source of funds through which you are making the prepayment. Also, remember that taking another loan to prepay existing one may also be not allowed.
Moreover, those job seekers who are new to credit, i.e. they have not yet availed any loan or credit card, might not have a credit score. Since they have not been able to build a credit score, their job application's evaluation might not include a credit check, or they might be required to build a credit score through regular use of credit cards, and their credit behaviour might be evaluated once the credit score builds up.
How to improve credit score
A poor credit score reflects irresponsible behaviour towards loan and credit card repayments. It can also be a key reason for both approval and rejection of your Axis Bank Personal loan. And with more and more employers beginning to consider credit score as one of the parameters while evaluating job applications, a low credit score can certainly hamper the chances of securing a job.
If you are looking out or searching for a new job, you need to first adopt the habit of fetching your credit report periodically, at regular intervals, especially when planning to submit an application for an Axis Bank Personal loan. This would enable you to know your credit score beforehand and, accordingly, take corrective measures to improve your score. Periodical fetching of credit scores and reports would also prevent clerical errors or fraudulent transactions from getting bypassed and pulling down your credit score. Make sure you repay your loan EMIs or credit card bills timely and in full. Any default, delay or missed payment would be reported by your lender to the credit bureaus, who in turn would accordingly pull down your credit score.
Potential job applicants should also avoid multiple direct loans or credit card enquiries to lenders within a short span of time. Such enquiries are treated as hard enquiries by the credit bureaus, and each such enquiry can pull down or reduce your credit score by a few points. Instead, they may visit online financial portals to simultaneously compare and choose the right lender for their loan or credit card.
Job seekers must restrict their credit utilization ratio within a 30-40% limit since a higher ratio would depict you as a credit hungry person and therefore more likely to default in future.
Additionally, keep in mind that In India, the practice of credit screening during the recruitment process has currently been adopted by a few companies and banks. But more and more organizations and sectors are expected to soon adopt this strategy while hiring employees. This practice is being considered an effective way to flag potential problems in candidates, reflecting through their credit score. Consistently missing debt repayments or frequent delays may indicate that the job applicant has been financially indisciplined and is more likely to commit fraud or unethical acts in case situations such as excessive debt arise in future.
What to keep in mind when already repaying a personal loan?
When you are already in the midst of the loan tenure of Axis Bank Personal loan or are planning to make Axis Bank Personal Loan Preclosure due to the presence of surplus money thanks to a bonus or investment maturity, having a good credit score plays some role or the other in all steps involved in taking and repaying a loan. So ensure to take all steps not only to build but maintain a high credit score to smoothly go through all such credit-related processes.
