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My friend, Peter, is receiving calls from a credit card company that he won't be able to take out loans at good rates in the future if he doesn't clear his debts asap. It's true that unpaid balance can reduce credit score, but will it have any effect on future loans, too? Is credit score the only factor that the lenders consider while deciding the interest rates on loans?

Credit score is a major factor which the lenders take into consideration while deciding whether or not to grant your loan request and if yes, then at what rate of interest. However, lenders also assess your income and your debts to decide your creditworthiness.
It's always better to reduce your debt, so that your credit utilization ratio is less than 30%. Also, it's good for your credit score to repay your credit card balances at every billing cycle.

Sub: #1 posted on Thu, 10/06/2016 - 13:07

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