Do you want to apply for a loan? Here’s how you can improve your credit score to get money from the banks

0

New Delhi | Jagran Business Office: You wanted to apply for a loan from the banks, but your application was rejected somehow? Well, it could be due to a bad Cibil score which is a major factor that determines your candidacy along with work experience, income, etc. Don’t worry, if you don’t know what Cibil is or how to improve it to get a loan from banks, we’re here to help you with everything you need to know about Cibil and its process. Let’s start by knowing what Cibil means.

What is Cibil?

Cibil, also known as credit score, stands for Credit Information Bureau (India) Ltd. This is a three-digit score, ranging from 300 to 900, which reflects your creditworthiness. It is a key factor for banks or any other lender to decide on the eligibility of applicants before approving loans or issuing credit cards. The RBI mandate requires all lenders to verify the Cibil score of each loan/credit card applicant before granting them a loan. If you have a low Cibil score, the bank feels that you may have poor credit management skills.

How to improve Cibil / Credit Score:

1 Make timely EMI payments

If you have an outstanding loan account, be sure to pay your EMIs on time, as late or non-payment can lower your credit score. Such things are reflected in your credit history, reducing your chances of getting a loan.

2. Low Balance

If you are using a credit card and have used it up to its upper limit without paying the amount owed, it suggests a bad financial situation. This is why banks avoid giving loans to these people. Always pay off enough credit cards to create a good impression.

3. Avoid too many credit cards

It is suggested to have a safe number of credit cards according to your income to manage them well. the longevity and timely payment of bills on these accounts can increase the Cibil score. It reflects your ability to pay to the lender.

4. Report and resolve inaccuracies

It is possible that inaccurate information will be reflected in your credit history. This can happen due to a lack of updates or technical issues. Report these inaccuracies to your lender and resolve them to keep your Cibil clean.

REMARK: You may not have generated a Cibil score, if you do not have an outstanding loan account. It is important to take out a loan or fund something to build up a credit history.

Posted by:
Sugandha Jha

Share.

Comments are closed.