From wedding cancellation to job loss, poor credit score leads to more than just loan denial

If you believe a credit score is vital only at the time of applying for a loan, then think again. It may impact you across your personal and professional life. Sample this: a wedding was cancelled in February last year in the Murtizapur area of Vidarbha region of Maharashtra after the bride’s family discovered that the boy had a low CIBIL score.

When the bride’s uncle insisted on checking the credit report, it revealed multiple loans and a poor repayment history, raising concerns about the groom's financial stability. Finally, the marriage was called off, much to his chagrin.

In another incident, an individual's appointment to the post of Circle Based Officer (CBO) at the State Bank of India (SBI) was cancelled due to his poor CIBIL score, which revealed a long history of defaulting on bank loans.

His credit report disclosed that he had received three personal loans ranging from ₹90,000 to ₹1.5 lakh during the time he served as Deputy Manager at ICICI Bank in 2018, and that he was irregular in repaying the amounts. Additionally, he defaulted on his credit card payments, leading to a loss of ₹40,000 to HDFC Bank in 2019.

When that person challenged the SBI's decision of rejecting his candidature in the Madras High Court, the court also rejected his plea, saying, "a person with poor/no financial discipline cannot be trusted with public money.”

What is a credit score?

Those who are not aware, a credit score (or CIBIL score) is a three-digit number that determines a person's creditworthiness and is checked by financial institutions before they decide whether to disburse a loan.

The higher the score, the credible the person. A score of more than 720 indicates the person can be trusted for new lending, and when it is below 600, banks tend to deny loans or charge a higher interest rate on loans disbursed to them.

To sum up, a credit report is not only a measure of someone's ability to repay a loan but also a reflection of their financial soundness and personal propriety, which can impact matrimonial and job prospects.

You can check your credit score for free here

Disclaimer: MintMoney has a tie-up with fintechs for providing credit; you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article only intends to educate and spread awareness about credit needs like loans, credit cards and credit score. MintMoney does not promote or encourage taking credit, as it comes with a set of risks, such as high interest rates, hidden charges, etc. We advise investors to discuss with certified experts before taking any credit.