The three-digit numeric, which is calculated by the credit bureaus for all individuals who borrow from a bank or any financial institution, is called a credit score. At regular intervals, the banks and financial institutions submit their data of borrowers and information related to it to these bureaus for the purpose of accurate calculation of credit score. Later they use credit score as an eligibility criterion while assessing new credit applications. A regular credit score check is very essential.
Currently, the world is bracing the impact of Coronavirus and its impact on people’s health and wealth. In such a time, the government has through RBI directed banks to implement a moratorium of 3 months. Under this scheme, your monthly obligation can go unpaid without attracting any penalty or late fee for the period of March to May 2020. However, during this period, interest will continue to accrue on your balance and in case of loans, the tenure will be extended by 3 months plus the interest accrued will be added in your principal amount. It means that if you do not pay your obligations, then, later on, you will have to pay more.
Thus, if your income has not been affected too much due to the pandemic scenario, then its is best to continue paying your debt obligations on time and make sure your credit score does not take a hit.
Continue Reading : How Can We Shield Our Credit Score During Quarantine?
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