CIBIL score plays a vital role in getting credit card application approval. It is one of the requisites that you are required to fulfill. Using a credit card wisely and responsibly can only help you in building a good credit score. However, there are credit card issuers that issue credit cards without any credit history but you need to fulfill other eligibility criteria like minimum age and monthly salary requirements. There are many factors that can affect your credit score negatively, and ignoring them can create hurdles in your way. Here are some downsides of ignoring credit scores:

  1. The higher interest rate on loans: If you keep ignoring your credit score then it will make it difficult for you to avail of personal loans. Even if you get a personal loan then the lender will charge a high-interest rate on the loan.
  2. Lower credit card eligibility: This also affects your eligibility while applying for a new credit card. Having a low credit score can increase the chances of hard inquiries and make it difficult for you to get another credit card.
  3. Lower eligibility for loan transfers: lenders who issue the same loans might not think you are eligible for loan transfers. If you have a good credit score the lenders still might think of allowing you to transfer one loan to another lender in order to repay the loan amount with a low-interest rate.
  4. High fees and charges on loans: Bad credit score attracts the high fees and charges on loans and this is only going to lead you to a debt trap.

How to improve credit score?

  • To improve or start your credit journey you can apply for entry-level credit cards or secured credit cards. You can also use the third-party Buy Now Pay Later services to improve your credit score.
  • Another way is keeping a track of your credit report and finding the mistakes immediately reporting the same.
  • Paying the credit card bills on time and in full. You can opt for auto-debit services so that you do not miss the due date.
  • You can set the spending limit threshold, on reaching the threshold limit you will be notified so that you can stop using your credit card for another transaction and maintain a low credit utilization ratio.

Bottom Line:

To conclude, it is not advisable to ignore your credit score as it can definitely create problems for you. It can adversely impact your future opportunities for taking a new loan or a credit card. You might have to pay more charges. You need to adopt healthy ways to build a good credit score like paying the credit card bills on time, low credit utilization ratio, taking small personal loans and repaying it timely, using third-party Buy Now Pay Later services, etc. Another thing you can do is register yourself for auto-debit services, you won’t have to worry about missing the due date.

Comment down any other downside of ignoring credit score that you have faced.

Additional Reading - Types Of Credit Cards In India