What Is A Credit Score?



Your Credit Score is one of the most important pieces of data about you and your finances, and is seen by banks, credit card companies, lenders, even employers and insurance companies. It is a 3 digit number that is used to predict the likelihood of you paying off a loan or if the lender could lend you more money, offer other products and services and give you the much sort after Gold Card or Platinum membership card.

Have you seen in banks that there is a "Preferred Customer" line? Whilst you wait in line, other people come, transact and then go. These preferred customers generally have good credit scores and are considered to be reliable payers of debt.

Have you ever been refused a loan, or a credit card? That could be due to having a low credit score or having missed payments or a bad record on your credit file.

When you take a loan out, or even when you apply for a bank account, your credit score will be checked. If you are on the Blacklist, or considered to be a bad customer due to missed payments, debt, or too many obligations, your credit limit will be reduced, or your credit score will be lower. A low score means that some products will simply not be available to you.

When you have a loan, you payment history gets sent to the CIC (Credit Information Corporation) every month. If you have missed a payment, it gets reported, and missed payments reduce your credit score. If you successfully pay off your loan, it gets reported, and that improves your credit score. It also shows lenders that you are someone who pays off your debts, and shows that you are a responsible borrower.

Lenders like responsible borrowers, and offer more products, services, lower rates, increased amounts, Gold, Diamond and Platinum membership and other such products to people with good credit scores.

Responsible borrowers are also more likely to get the bigger loans that they need later in life. You might want a new motorbike, a car, money to pay for college, money for a deposit on a new house or Condo Unit. You might need money to pay for a large hospital bill. All these future transactions will be more likely to be given to you, if you have a good Credit Score.

How do you get your Credit Report?

To get a copy of your CIC credit report, you need to first visit the CIC website (https://www.creditinfo.gov.ph) and:

  1. Click on “Services.”
  2. Select the option “Get a CIC Credit Report.”
  3. Read the Terms and Conditions carefully before clicking on the “I agree” button.
  4. Select your preferred Date of Appointment.
  5. Provide the needed personal information.
  6. Download and print your Application Form.

When you get that information, if there are bad records as a part of it, you can reach out to the companies that have filed that negative report against you and fix your debts with them. When the debts are paid off, your score will improve. With improved scores comes greater rewards, and you are more likely to get more credit in the future.

If you are the kind of person who can pay cash for a car, a house, a motorbike and a holiday, then maybe you are less interested in your credit score. But if, like 99% of the population, you need credit from time to time, knowing and understanding your credit score will give you a better future, today.

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