Checking CIBIL score, or a credit score assigned by other bureaus is something that most lenders do when assessing your credit application. If your score is low, they may hesitate to offer you credit. This is because a low credit score makes you a high-risk borrower. However, some lenders offer you credit even if you have a credit score that’s less than ideal. For instance, a good CIBIL score is considered to be 750 and more, but you can get a personal loan for CIBIL score of 550 as well. Sometimes referred to as bad credit loans, these loans are exactly what the name suggests – loans that you can get with bad credit.
However, you should practise caution while you apply for a bad credit loan. Relying too much on these can put you under more debt and hamper your creditworthiness for future needs. It may also make repayment challenging since these loans generally come at a higher interest rate. To avoid having to resort to a bad credit loan, you can improve your credit score and boost your creditworthiness. Soon, you will be eligible for a loan with attractive terms that make borrowing easy and affordable!
Here are some of the best tips to help you boost your credit score and creditworthiness.
Repay dues on time
In order to boost your credit score, make timely repayment a priority. This will help you create a disciplined track record that boosts your creditworthiness. Automatic payments and alerts can ensure you do not miss out on any of your loan or credit card bill payments. If you have a large amount of debt and do not have the funds to meet this obligation, consolidate all of your debt into one. This eases your task of managing different due dates and makes repayment more manageable.
Check your credit score frequently
Checking your CIBIL score or credit score at regular intervals is one of the easiest and simplest ways to keep an eye on your credit health. This is a comprehensive score awarded by credit rating agencies after considering certain key factors. The score is based on a credit report that contains a summary of all these factors and can help you amend habits or decisions to boost your score. In addition, checking the CIBIL score, and report helps you spot and report inaccuracies. Since unresolved discrepancies can hamper your credit score too, be proactive.
Limit new applications
Try not to apply for new loans or credit cards multiple times in a short period because each application will lead to a hard inquiry of your credit score by lenders. Too many inquiries in a short period can make you seem like a high-risk borrower as this implies credit-hungry behaviour. So, apply only if you meet the lender’s eligibility criteria, need the funds, and have a repayment plan as per your current debt. In this regard too, regularly checking the CIBIL score is a good way to proceed. Your credit report contains information about the number of inquiries on your profile, and by viewing this and your existing burden, you can decide if it is the right time to apply for new credit.
Keep an eye on your credit limit and utilisation
Availing of too much debt in a short span and utilising it the maximum reduces your creditworthiness. So, don’t max out your credit cards every month. Similarly, keep an eye on your credit utilisation ratio, which refers to the total amount of revolving credit you use each month. While you should strive to keep this ratio at 30%, start out by at least getting it down to 50% to boost your credit score. Here too, checking your CIBIL score at frequent intervals can help you plan your use of credit better.
Keep in mind that if you have a low score, getting new credit can become extremely challenging. While you can get a personal loan for a CIBIL score of 550 or even lower, its terms and fees may not be in your best interest. By checking your CIBIL score before applying for a loan or a new credit card, you can make informed decisions. This also helps in case you want to see how your new and improved credit behaviour is actually boosting your score.
Checking CIBIL score is easier and faster with the digital services offered by Bajaj Finserv. Here, you can check your CIBIL score for free online using your PAN Card information and a few other basic details such as your mobile number and monthly salary. With this simple process, you can not only see your credit score but also get your credit report in minutes. So, get started today and get insights to boost your creditworthiness.
