Credit score can affect your loan eligibility

Lender looks at the borrower from the point of view of ability to repay the loan and willingness to repay the loan. Your income defines your ability to repay the loan, whereas your willingness to repay the loan is indicated by your credit score. “Banks pull out the credit score while appraising the loan application. The credit score tells the bank your repayment track record,” explains Rajiv Raj, co-founder and director of Creditvidya.com.Credit score can be low due to various reasons such as default on a loan, delayed repayments of the loan, failure to pay loan dues due to a dispute or sheer oversight. Banks report such things to credit bureau and the same pull down your credit score. “Low credit score means that the borrower is not keen to repay the loans on time and banks may not lend to such a customer,” adds Rajiv Raj.