A Quick Guide To Help You Boost Your CIBIL Score
Is your instant personal loan rejected due to low CIBIL score? In this guide, we will explain different ways that can help you boost your score in the next few months.
CIBIL score is an important parameter that helps lending institutions determine how responsible you are with your money. The three-digit number, ranging between 300 to 900, is the summary of your credit history and repayment behaviour. When you apply for a new loan, the lender usually checks your CIBIL score to ascertain your creditworthiness. If your score is more than 700, you have higher chances of getting an instant personal loan at low-interest rates. However, you can also get a personal loan for a low CIBIL score where interest rates are higher than expected.
Now, let’s have a look at four easy tips that can improve your CIBIL score to a great extent.
Review your credit report frequently
Your credit report is a crucial component in the loan application process. So, you should examine your credit report often to understand your current situation and where you went wrong. For example, if your CIBIL score is low due to late payments, you need to ensure prompt payments in the future.
Assessing your credit report will also alert you about some inaccuracies that might cause your score to decrease. Let’s say, you have paid the full loan amount, but it is still showing due on your credit report. In the case of such discrepancies, you can immediately report the correction to CIBIL.
Pay your dues on time
Your outstanding debt settlements can have a massive impact on your CIBIL score. If you intend to take an instant personal loan, you need to become more disciplined while repaying all your EMIs and credit card bills. Timely payments not only save you from paying the late payment charges but also keeps your creditworthiness intact. Delayed payments can give a negative impression to lenders, which can further drop your score. So, it is recommended to set reminders or alerts on your payments so that you never miss any due date in future.
Build a healthy blend of secured and unsecured loans
If the case of low or average CIBIL score, create an ideal combination of secured and unsecured loans. Not only does it boost your score but also portrays your experience in handling different kinds of loans.
The lending institutions prefer a higher concentration of secured loans from a credit rating point of view. Too many unsecured loans can hamper your CIBIL score. This is because lenders think that an individual with more unsecured loans cannot manage their finances efficiently. And thus, they hesitate to lend to such persons. But, in case of a high number of secured loans, the credit score tends to go up.
Avoid multiple loan applications
When you apply for a loan, the lender conducts research on your CIBIL report to check your creditworthiness. But, submitting multiple loan applications in different institutions would invite too many such investigations causing your CIBIL score to drop. Hence, numerous applications within a short period not only lower your creditworthiness but also display you as a person desperate for credit.
Bottom line
All the tips mentioned above will boost your CIBIL score. But, remember, it is not going to happen overnight, and you have to keep working on managing your credit activities. Further, you will find many lending institutions that provide personal loan for low CIBIL score. However, if you want to enjoy lower interest rates, it is better to avoid them.
