You are likely living under a rock if you think banks will lend you a loan when you apply and that it is a one-way process, where you have to choose the bank based on its interest rate and file some cases and you’ll get the loan upon presenting your request.
The truth is that the credit market is a high-risk market and the lenders are sceptical in giving loans to anyone without thorough scrutiny of the potential borrower’s track record and capacity to repay. One of the most critical aspects of knowing a customer and his creditworthiness is the credit score.
What is a credit score?
A credit score is a score based on your credit history which takes into account your behaviour towards a loan booked in the past including your repayment patterns, defaults, if any, the loan tenure, and other related aspects.
Lending companies including banks and NBFCs refrain from giving loans to first-time borrowers as they do not have a credit score and it is thus difficult to judge the individual’s repayment patterns. There will be no credit score if you have not taken a loan ever. It can get tricky in such situations to avail credit. Hence, if you are looking to take a car loan or a Bajaj Finserv home loan from Finserv MARKETS in future, or are planning to have a business and intend to avail small business finance for its set up, you need to plan right away.
Here are a few steps you can take to improve your credit score without having a loan:
1.Opt for a secured credit card
A secured credit card is a credit card for which a deposit is taken when a card is issued to you. The deposit taken is usually equal to the credit limit of the card. The catch? A secured credit card is used temporarily. Choose a secured card that has the lowest annual fees. Additionally, do research on whether the credit card company reports to the major credit bureaus.
2. Look out for credit builder loans
There are some secured loans that let you hold the amount in your savings account and simultaneously let you make payments from it. Once the loans get paid off, the borrower then receives the authority to access the funds.
3. Take store credit cards
The store credit cards are usually closed loop cards and sometimes co-branded with a lending company. These cards usually come with less credit limit and can only be used to shop at the stores from where you have taken them. For instance, the Bajaj Finserv EMI Card is an exclusive network card which acts as a pre-approved loan and helps you convert your purchases into easy, customized EMIs.
Finserv MARKETS offer a variety of digital lending products which have become a preferred destination for all kind of customers due to its quick disbursal, flexible repayment options, hassle-free and seamless online application process. Finserv MARKETS provide customers with 500+ financial and lifestyle products to choose from such as Personals Loans, Business Loans, Loan against Property, Professional Loan, Car Loan etc. It provides a fast online paperless service experience through its digital channel. Finserv MARKETS is a one-stop destination for all the financial needs of an individual and provides a unique digital experience to the customer.