Why a Good Credit Score Matters at Every Life Stage

Good Credit Score: Loans and credit cards are examples of credit products that can be crucial for reaching a variety of life objectives and enhancing one’s quality of life. One of the key requirements for banks to approve any loan or credit card, though, is having a high score. The types of credit instruments available to people at different periods of life will be discussed in this article, along with the significance of maintaining a high score and profile throughout.

Credit Importance & life stages:

Let’s examine a few life stages and the credit products that are available to people at each stage. We will also examine how obtaining credit products is significantly influenced by one’s score and profile.

1. Credit card in the Initial days:
For some people, a credit card is their first credit product. A person may accept a credit card when they begin working. The bank might grant the credit card without any security if the person is employed by a respectable business and makes a respectable living. The bank may occasionally request that the customer obtain a secured credit card in exchange for a fixed deposit. Typically, the secured credit card’s credit limit ranges from 75% to 100% of the amount of the set deposit.

The person will have no credit history at this point in their life because they are using their first credit product. Therefore, a credit card is a great place to start developing a positive credit profile and score. Your score will progressively rise as long as you use the credit card frequently and pay off the entire balance each month by the due date. Approximately six months from now, your score will be respectable. If you meet the other requirements, you can obtain more credit products once your score is high.

Numerous advantages come with credit cards, such as fast discounts or cashbacks, reward points, free memberships, and interest-free credit for up to 50 days. As a result, you can use credit cards to improve your credit profile and score while still taking advantage of these benefits.

2. Home Loan:
An individual may wish to buy their own home when they have established themselves in their career. Due to the high cost of real estate, the majority of people must apply for a home loan. Along with income and other qualifying factors, banks consider a positive score and profile when assessing a house loan application.

Best Score for Home Loan:

When all other qualifying requirements are met, banks view a credit score of 750 or higher as favorable for approving a house loan application. The bank examines the credit profile in addition to the score to look for any defaults, settlements, or delays in loan repayment. The bank will move on to the following eligibility checklist criterion if a person has a spotless payback history.

A single applicant’s income might not be sufficient to cover the house loan EMIs in certain situations, especially when the loan amount is large. The bank might request a co-applicant in certain situations. The bank will assess both the primary and co-applicant’s credit profiles and scores when reviewing a joint home loan application. Therefore, while applying for a home loan, the score and profile are crucial. As a result, the application or applicants must maintain a positive credit profile and score.

Personal Loan:
In addition to their work, certain professionals might enroll in skill-development courses. They advance in their careers and improve their skills thanks to these courses. The tuition fees and the test fees for these professional courses may be on the higher side and necessitate the individual to opt for a personal loan.

Personal loans are subject to a stricter screening process than other loans because of their unsecured character. When applying for a personal loan, the applicant’s income, score, and profile are important considerations. Therefore, maintaining a positive score and profile is crucial for an individual. It will facilitate a personal loan application’s seamless processing.

How to Maintain Credit Score?
Since on-time payments have the largest influence on your score, make sure you constantly pay your credit card bills and loan EMIs on time to keep your credit profile and score high. Make sure you use only a modest percentage of your available credit to keep your credit utilization ratio below 30%. To improve your creditworthiness, keep a balanced mix of unsecured credit (credit cards and personal loans) and secured credit (home or auto loans). Applying for too many credits at once can lower your score, so try to avoid doing so. To take advantage of a longer credit history, which raises your score, keep older credit cards open.

Also Read: HSBC Credit Cards: 20 New Travel Partners Starting April 2025

As you move through different phases of life, you pursue various goals. To achieve some of them, you may rely on credit products like loans and credit cards. Banks consider a strong credit history a key factor for approving applications. Therefore, maintaining a good credit score and profile throughout life is essential, as it helps speed up credit approvals when you meet other eligibility criteria.