What Is Credit Score And Why Is It Important?

If you haven’t done your research yet, you might assume that it's enough to have a stable source of income and completing all the requirements to get your first credit card or loan approved.

However, you might still find your application rejected. Why, you ask? It might be your poor credit score getting in the way.

To put it simply, a credit score is a three-digit number ranging from 300 to 850, summarizes your borrowing history and predicts your likelihood to pay off a loan. 

It gives lenders a quick look at your creditworthiness, making it a major factor in getting approved for a credit card or loan. 

If you want full context on How to Build Your Credit Score—or want to know What is a Bad Credit Score so you can avoid common pitfalls—understanding these basics is the best place to start.

1. Easier approval of new loans and credit

A higher credit score shows lenders that you have good borrowing habits, labeling you as a low-risk borrower. This makes you more trustworthy in their eyes, significantly increasing your chances of getting approved for new credit. 

If you’re just starting out, best read up on the Best Credit Cards for Beginners. It's a great next step, along with learning What is a Credit Card Annual Fee and How to Avoid it? so you don't end up paying extra fees.

2. Higher credit limits or loan amounts with lower interest rates

A good credit score proves your ability to pay back your credit on time. For this reason, lenders are more willing to grant lower interest rates and boost your spending power. 

Once your repayment record is looking good, follow these proven tips on How to Increase Your Credit Limit in the Philippines to bump up your available credit.

3. Discounted insurance rates

You’re much more likely to be offered more affordable premiums for your car or life insurance if your credit is good. Having a bad credit score, on the other hand, may result to higher premiums. We don’t want that, of course.

4. Negotiating power

Did you know you that having a good credit score can get you better deals? You can actually use it to your advantage when haggling! Utilize your credit score to prove that you’re a reliable borrower.

5. Better chances of employment

When conducting background checks, some employers take look at one’s credit score and credit report. Most of them consider good credit appealing, as it might reflect your trustworthiness and responsibility as an employee. Meanwhile, a spotty repayment history, many open and delinquent accounts, and high monthly payments can be a turn off.

A lot of people hear about credit scores but aren’t sure how to check credit score for free or where to start. The good news is it’s easier than it sounds! 

Your score gives you a quick look at your borrowing history and helps you prepare for future plans. Here’s the simplest way to check it in the Philippines.

1. Go to CIBI or TransUnion
These are the two main companies in the Philippines that provide credit scores. Think of them as record keepers for your borrowing history.

2. Visit their website
Search for CIBI or TransUnion online. Both allow you to request your credit report. You’ll need to create an account.

3. Prepare one valid ID
You’ll be asked to upload or show an ID to confirm your identity. This step protects your information.

4. Pay the fee
Credit reports usually come with a small fee. Payment can be made online through the options they provide.

5. Complete identity verification
Some platforms ask you to take a quick selfie video or do a short interview online. This is normal and only takes a few minutes.

6. Download your credit report
Once verified, you’ll receive your credit score and full report through email or your account dashboard.

7. Quick explanation of what you’ll see
Your credit score is a number that shows how well you manage loans and payments. Higher scores mean better chances of getting approved for loans, credit cards, and better offers.

Why you should check regularly?
You’ll know if there are mistakes in your record. You can track how your score improves as you build your financial history. It helps you plan for future loans, like getting a phone, laptop, or even a bigger loan someday.

Ready to boost your credit score? Paying on time makes a difference! Consider a Home Credit installment plan for quick approvals and flexible payments that fit your budget.

You can also download the Home Credit Online Loan App on Play Store or App Store to find offers, manage your loans, and more!