If you are worried about availing loan with a poor CIBIL score, you have come to the right place. This article will guide you in knowing the essential factors for correcting your credit report. While you visit any lender with a loan application, they first look at your CIBIL score to know the past dues, if any.
This report is formulated by the central authority Credit Information Bureau of India Private Limited (CIBIL) to represent the synopsis of your credit-related information. If they find any error in that report, your application will be seized until it gets resolved.
Basic Understanding of CIBIL Score
The score is a three-digit numeric figure representing all your credit details with the various lenders. These details are taken from your accounts. The range of your CIBIL score will vary on your payment status of credit cards and loans taken, your past dues, and other factors. The CIBIL score also helps understand your worthiness of repaying the loan you might take in the future.
The basic extent of the CIBIL score is between 300 and 900. So, it is clear that individuals with high scores get better opportunities to approve their loans. Different lenders set varying eligibility criteria to sanction the loan amount. However, a major percentage considers CIBIL score as one of the main criteria to approve the loan. Therefore, always try to keep the CIBIL score exceeding 750 so that you don’t have to face any difficulty in loaning in the future.
How to Repair Your CIBIL Score?
Keep Open Your Old Accounts
If you want to repair the cibil score, it is advisable not to cease the operations of the old accounts. Such accounts support the lenders to acknowledge your paying back capacity previously.
Pay Your Dues Timely
You must ensure that your ongoing EMI or credit card payment is not missed. Set reminders on a certain month’s date to avoid such major mistakes. Following this, you can be able to hold up your CIBIL score.
Track your CIBIL report regularly
The borrowers often get into a false position due to the wrong information on EMI payments and others recorded in the credit report. Such things can be eliminated if they can be regularly checked.
Have a Balanced Credit Mix
To enhance your credit score, always maintain a balanced credit mix. That means you must possess the perfect combination of credit cards and secured and unsecured loans. Prioritizing only one form of credit can negatively hit on your CIBIL score.
Increase the Limit of Your Credit Cards
On requesting your lending bank, you can increase the maximum limit of your credit cards. It will eventually lower the credit utilization ratio and boost your credit score.
What possible ways of getting a personal loan with a poor CIBIL score?
Opt for a Low Loan Amount
Since you are susceptible to how to get a loan with a poor CIBIL score, it will be the right decision to ask for a low amount personal loan. From the lender’s perspective, you are known as a defaulter. Therefore, it will be hard to get a huge loan at once. To increase your chance of repaying the loan, get inclined to have a low loan amount.
Pinpoint the Errors Recorded in the Credit Report
Due to unknown reasons, your credit report might misrepresent your credit information. In such a case, you must resolve those faults as soon as possible. Try to update your credit report immediately from the concerned authority and enhance your CIBIL score to qualify for personal finance.
Get a Guarantor With a Fair Credit Score
When you are in immediate requirement of a personal loan but can’t avail of it due to a low CIBIL score, you should jointly apply for a loan. The guarantor or co-applicant will help you get permits so that you can even acquire a personal loan with a poor credit score.
Show Your Income Statement
When you can’t apply for a loan due to a low CIBIL score, the favorable way to increase the chance of getting a loan is by showing your lender the income statement. When they notice that you have a steady job with a hike in income, they will easily consider your loan application against a high-interest rate.
Protect yourself from the exploiters who can provoke you into getting loans at favorable terms and conditions. On agreeing with their unjustified conditions, you can fall into a financial trap from which getting back can be difficult. Therefore, always consider the transparency of your lender to prevent the risk of a financial crisis.