Did you know that you should have a healthy CIBIL Score to make you ‘Personal Loan ready’? Not to worry if you have not maintained it well. Read on to reveal four tips to improve it!
Have a Personal Loan in mind? Your CIBIL Score will be the first parameter that your prospective creditor will consider while measuring your Personal Loan eligibility.
If you have managed to maintain a CIBIL Score of around 750+ or more, you will see no hassles come with your loan approvals.
If your CIBIL Score is not decent, your loan application might not get an approval from the service provider.
Even if they sanction the loan, they may charge you an exorbitant interest-rate which you may not afford.
Has creditor turned down your Personal Loan application recently? Have you not been frequent with the payment of credit card outstanding? Are you thinking to apply for a loan again? Then, you should improve the CIBIL score first.
In the same context, let’s present you with four easy ways to enhance your CIBIL Score.
- Pay all Your Bills on Time
You should take into account that your payment history makes for 35-40% of your CIBIL Score more than other loan eligibility factors, approximately.
If you have not been paying your existing loan EMIs on time, defaulted many times on your credit card bills, this is the right time to start paying everything on time.
If you have missed making payments in the past, make sure to stay current. Why? Every time you pay for your outstanding, it reflects your CIBIL Score positively. The longer the consistency of your bills, the higher will be your CIBIL score.
- Try to Maintain an Active CIBIL Account
Creditors do not consider loan applicants who are yet to have an active credit history or have a zero credit history.
The concept is simple to understand – when you don’t have a credit history; lenders put your case under the category of ‘irresponsible borrower.’ When your profile goes into such a category, your loan approval may go for a toss.
Lenders always want to ensure that a borrower has an active repayment or credit history before accepting the loan application of such a borrower.
It just means that your financial profile is in dire need of the credit account and you should keep it in good health.
Do not forget to have a credit card in your name to start building your credit account.
Remember that for your credit report to generate; you need to use your credit card at least for six months. Instantly using your credit card and applying for a loan may not work.
- Do Away With All Negative Listings
As a responsible borrower, you need to keep away all negative listings on your credit card to keep your credit report clean.
Example – If you have been wrongly billed and have not paid the amount assuming that it was not a purchase made by you, always make it a point to secure your CIBIL report.
Take all measures to settle the dispute mutually with your merchant and the bank.
Employ all steps to not to report it to the court. A court proceeding will see your profile put on the backburner for at least 7-10 years.
Overcome all defaults before they get listed in your credit history and hamper your future Personal Loan applications.
- Do not Apply for a Personal Loan With Multiple Lenders at a Time
Make it a point to not ask for a Personal Loan from too many creditors at a time. An inquiry is made on your credit account each time you apply.
When a lender observes that you have applied to many service providers, they may consider you a misfit case. They may also assume that you are in for an economic fraud or con.
The Bottom Line
Want your CIBIL Score to improve quickly? Do nothing; simply take all efforts to incorporate all the discussed elements to boost your CIBIL Score.