The maintenance of a good CIBIL score is imperative for securing loans in the future. A CIBIL score ranges anywhere between 300 to 900, where a higher score indicates a better credit standing. Businesses usually assess your CIBIL report and rarely offer loans to people who have a CIBIL score below 600. The CIBIL score is a three digit number representing your credit history and is reported by TransUnion CIBIL Limited in India.
You can easily check your CIBIL score by using the Finserv MARKETS App where you need to fill in basic information like – email ID, pincode and PAN card number. For individuals who are employed will need to fill in their monthly income while for self employed individuals – the annual turnover of the organization needs to be mentioned. Following these easy steps you can then download your Financial Health Check Report(FHCR) and find your CIBIL score therein. It is important to check your CIBIL report from time to time to make sure there are no discrepancies in it. It could be possible that you are unaware of the things that impact your credit score and may be dejected in case you receive a rejection on your loan application.
It’s a common notion that taking a personal loan has an impact on your CIBIL score, but there are ways in which it can actually boost your credit score if planned carefully. These are –
Minimum Loan Applications
It is recommended to do adequate research before you apply for a loan. Multiple loan applications can portray a picture of credit hungriness. You must check your CIBIL score to ensure you have a good chance of receiving the loan, your potential to pay on time as well as the amount of monthly installments. (Including lock in period, if any) before sending in your loan application. This can help in boosting your credit score as a well planned and conservative loan applicant.
Take into Account the Interest Rate and Processing Charges
A low interest rate is the first thing that people look for while applying for a loan, but attached with that are processing charges which often go unnoticed. You can apply for a Bajaj Finserv Personal Loan available on Finserv MARKETS which comes with benefits such as minimal processing charges and flexible repayment options of 12 -60 months. All you need to do is submit basic KYC documents and you can receive the money in your bank account within 24 hours.
Consider Your Repayment Capacity
While you may be tempted to take a large amount as personal loan, it is important to gauge your credit standing and your ability to repay the loan. It is important to decide the loan amount carefully and to apply for a loan amount prudently. This is to ensure timely repayment of EMIs. You must also take a loan only for specific needs like remodelling your house, consolidating your debt or for any unplanned financial exigency. It can also be an alternative to a payday loan. But you must be cautious against taking a loan to fulfill an impulse purchase or any expenses that can be delayed or prevented. There are various other types of loans available for specific needs like buying a house or for business purposes which are tailor made to cater to such needs.
Don’t default on EMI Repayments
One of the major reasons that can negatively impact your credit score is defaulting on your EMIs. Credit cards and personal loans which are essentially unsecured come with high risks. Lending institutions are extremely cautious when giving out such loans and conduct stringent financial health checks. Thus having a history of credit defaults can decrease your CIBIL score and lower your chances of securing a personal loan.
Refrain from Taking Multiple Loans
As you repay your monthly installments you will increase your credit score and may fall prey to various other kinds of debt instruments offered by financial lending firms. This may lead you into falling in a debt trap causing you to pay multiple monthly installments and may not have enough money to cover all your daily expenses. Such an EMI load can be difficult to repay which then culminates into exorbitant penalty charges levied by the lending firms. This amount may add up to a very large sum, way more than what you initially borrowed. Living under the burden of debt is never easy. It is important to keep your budget and needs in mind if you are thinking about opting for multiple loans. Any default can also hamper your future chances of securing a loan.
It is important to take these things into account while choosing to opt for a personal loan. Being prudent and wise while dealing with finances is always appreciated and has a good impact on your overall financial health. You can also avail various types of personal loans like the Hybrid Flexi Personal Loan available on Finserv MARKETS for added convenience and benefits – you can opt for a loan amount of up to Rs. 10 crore simply with an online application. You have the option of paying only for the amount utilized. The entire loan application can be done online, hassle-free.
Finserv MARKETS, a subsidiary of Bajaj Finserv, is a one-stop digital marketplace that has been created for consumers on the go. It offers 500+ financial and lifestyle products, all at one place. At Finserv MARKETS, we understand that every individual is different. And that’s why we have invested in creating a proposition – Offers You Value. A value proposition that ensures you get offers which are tailor made for you. We also offer an amazing product range and unique set of online offers across Loans, Insurance, Investment, Payments and an exclusive EMI store. Be it in helping you achieve your financial life goals or offering you the latest gadgets, we strive to offer what you are looking for. From simple and fast loan application processes to seamless and hassle-free claim-settlements, from no cost EMIs to 4 hours product delivery, we work towards fulfilling all your personal and financial needs. What’s more! Now enjoy the same benefits in just one click with our Finserv MARKETS App.