When applying for a personal loan online, a credit score plays an important role, and lenders first check your credit report to know your credit behaviour. If you have a score above 750, you can repay the bills on time.
But if you think you can get a loan just by having a score above 750, you are mistaken. Apart from credit scores, banks and lending institutions also consider the credit remarks in your report. If there are any negative remarks on your credit report, it will impact your creditworthiness negatively.
To have a clear picture, let’s briefly look at credit remarks and credit scores. By the end of this article, you will know which lenders consider more important.
A credit remark is a statement that indicates an individual’s financial activities in the credit report. This statement is created based on the payback history of your credit. Few lending institutions also check the credit remarks to gauge your credibility.
This remark appears when you have partly paid the bills or prepaid a personal loan. Lenders usually consider this as a negative remark. As a result, you might face difficulties getting your loan application approved by the lender.
This remark occurs when you fail to repay your dues for almost 180 days. It appears as “Written-Off” and is considered detrimental to your creditworthiness.
This remark appears when you settle your outstanding debts after the Written-Off statement, and the status occurs after 180 days of non-payment of your pending dues. Yourcredit score will be severely affected when you have such remarks in your credit report.
This remark indicates that you intentionally failed to repay the loan amount even with sufficient funds.
Closed indicates that you have repaid your loan amount fully. Once you close your account, ensure that your lender provides you with a closure letter or no dues certificate.
A credit score indicates your creditworthiness, and it ranges from 300 to 900. Having a score above 750 shows that you have stable financial behaviour. Moreover, you can quickly get low-interest personal loans with high credit scores.
The credit score is generated based on your payment history, credit utilization ratio, length of yourcredit history, credit mix, and new credit.
|Credit Score||Credit Rating|
|300 to 600||Very low|
|601 to 700||Low|
|701 to 760||Fair|
|761 to 800||Good|
You can have a good credit score above 750 and still get rejected by your lender if you have a lot of negative credit remarks. Moreover, lenders give more importance to your remarks as it shows your payback behaviour. Therefore, having a high score is not sufficient to get instant loan approval, and your credit remarks matter the most.
It is essential to review your credit report to know your overall credibility. You must make sure to keep negative remarks off the credit report. Making timely payments throughout your tenure period will help rectify your statement and increase your credit score considerably.