Although the credit score is not yet a key factor in India in transactions beyond lending, such as renting or employment, it is gradually becoming a make-or-break consideration. For instance, a wedding was called off in February this year at Murtizapur in the Vidarbha region of Maharashtra when the girl’s family discovered that the boy had a poor credit score.
Some key advantages of a high credit score
I. Leasing equipment: When you lease a vehicle or business equipment, the lessor would view you as a credible and low-risk lessee. This – in the long run – can help you save money.
II. Personal relationships: As mentioned above, there could be a few rare cases where future partners and their families check your credit history to judge your financial health. Therefore, a high credit score can minimise your chances of a cancelled wedding, just like in the case mentioned above.
III. Pitching before investors: Remember Priyasha Saluja of Cinnamon Kitchen from Shark Tank India, who bagged a deal from Boat’s Aman Gupta by impressing him with an exceptionally high credit score? All the sharks were jaw-dropped when she revealed that her score was 838.
IV. Better job prospects: Again, this is still not very common in the Indian context. Some jobs that involve dealing with money and lending may consider the credit score of job applicants. These jobs could be in a bank, financial institution or a fintech firm and may relate to lending and financial products.
V. Business association: There could be some finicky client or business associate who may insist on dealing only with those people who possess a high credit score. Warren Buffett once famously said that you can’t make a good deal with a bad person. And credit score is a reflection of a person’s intentions.
Disclaimer: Mint has a tie-up with fintechs for providing credit, you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article only intends to educate and spread awareness about credit needs like loans, credit cards and credit score. Mint does not promote or encourage taking credit as it comes with a set of risks such as high interest rates, hidden charges, etc. We advise investors to discuss with certified experts before taking any credit.
