Credit Score

Here’s How You Can Keep Your Credit Score Unaffected While Taking A Loan!

Taking out a loan is essential especially when you need cash fast to meet a financial emergency.

Besides, one should not forget that a loan can help one to improve their credit score in the long run, given they are careful.

It’s no rocket science –

Applying for a loan can negatively affect your credit score but that can be avoided when you are careful. You can do just that by keeping the following things in mind:

You should keep yourself from shopping around for a loan!

When you go to a non-traditional for loans without credit check, chances are high that you might be pre-qualified for the same since they will be running a soft inquiry on your overall financial history.

That is not the case when you are going to a bank and applying for a personal loan or making inquiries. They will readily commence a hard inquiry on your credit history which will bring down your score by at least three points!

Moral of the story – 

Don’t go shopping around for personal loans. And if you still want to do that, choose no credit check loans offered by non-traditional lenders.

Be sure to repay your debt on time, every time!

Sure you can miss your repayment deadline by a day or two and that won’t negatively affect your credit score a bit but if you fail to repay your debt even after 30 days – well, then you are in for a ride!

Do this and you will be labelled as a defaulter, of sorts since your case will be reported to the credit bureaus! The result – well a fallout that would damage your credit score a lot!

For instance –

If you had a credit score of say 780 but you failed to pay your installment within thirty days from the set deadline, your credit score would come down by at least 90 – 100 points!

Meeting deadlines is tough but if you follow a strict budget and financial discipline, meeting repayment deadlines won’t be a problem.

Keep yourself from applying for new credit when you don’t need them!

Avoid applying for a new loan from a lender if you don’t need it. That expensive phone or that diamond bracelet for your girlfriend can wait!

Sure, applying for a new loan helps in increasing your credit limit by many folds but at the same time, your credit score will be subjected to a lot of scrutinize – otherwise known as hard inquiries. Too much of that, your credit score and overall financial track record will receive a lot of negative limelight!

Don’t forget –

The ill-effects of excessive hard inquiries keeps hanging over your credit score for at least two years. Hence, be careful!

Building a good credit score takes a lot of years and yes, a lot of effort as well. Hence, it would be unwise if you do not take calculated steps when you are applying for a loan, to meet financial emergencies. Be sure to follow the unique pieces of advice mentioned above and you will be sorted!

Scroll to Top
Blog Pirate
Privacy Overview

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.