James Patrick Q Bonus l July 20, 2023 l Manila Bulletin
Your credit score is as powerful as a first impression. As the best-effort estimate of credit worthiness, individual credit scores largely influence banks and lenders when considering loan applications. The strength of your score indicates how likely you are to pay your loans back on time, in full, or at all. But
how exactly are you being perceived? Here are three things your credit score says about you.
How financially responsible you are
One of the key factors that your credit score reflects is your financial responsibility. Are you diligent in managing your finances? Does your track record reveal a good and timely bills payer? At just a glance,
your credit score sheds light on these financial behaviors. A high credit score is a ticket to being treated like a VIP; banks and lenders will see you as a trustworthy borrower who can honor financial commitments. On the contrary, a low credit score suggests a lack of financial discipline. Having a history of late payments, defaults, or bankruptcy might make lenders think that you are a “high-risk” borrower who may have trouble repaying borrowed funds.
Whether you can prudently handle debt
If you borrowed money in the past, your credit score also reflects how well (or poorly) you can manage debt. Keeping a clean credit history and maintaining a healthy balance between your borrowing capacity and outstanding debt does wonders for your credit score. Conversely, your credit score takes huge hits whenever you apply for multiple loans concurrently and repay these beyond the due dates.
What financial products or services you can avail of in the future
Your credit score can have a significant impact on your financial future. Beyond loan approvals, it can influence how quickly you are cleared for job-based credit background checks, obtain favorable insurance rates, or pursue broader investment opportunities. A high credit score opens doors to better financial opportunities, such as lower interest rates on loans, higher credit limits, and more favorable terms.
Your relationship with credit creates a ripple effect towards other aspects of your life. Though it’s not the be-all and end-all of your financial capabilities, your credit score is the impression you make on banks and lenders. Luckily, it’s never too late to adopt smarter financial habits. Improve your credit score by managing your finances, curbing your borrowing habits, and paying your credit card, utility, and telco bills on time and in full. To know where you stand, you may check your telco credit score for FREE at https://ccmobile.ph/establish-your-financial-persona.
*** James Patrick Bonus is the Deputy Country Manager & Chief Finance Officer of FinScore, a fintech
firm providing alternative data-based consumer credit scoring and identity verification solutions for
financial institutions. Japs is also a regular subject matter resource speaker for the Bankers Institute of
the Philippines and other organizations through Acepoint.ph Training Consultancy Services.