A credit score is an important parameter when it comes to processing a loan. It helps a loan lender or a bank to decide the trustworthiness of a loan applicant or a credit card applicant in making debt payments and EMI payments respectively. Hence, you need a good cibil score in order to get a loan or a credit card.
No CIBIL Score?
Now, it may happen that your credit/cibil score is not available. In this situation, you can get easily confused. This happens when you have not taken any loans or credit cards from any bank and there is not enough credit history. This situation can raise concerns in your mind when you are in need of a loan. Though you don’t need to worry, as there are things you can do build your credit score.
How to build your Credit/CIBIL Score?
If you have never taken a credit card or a loan from any bank, you simply don’t have enough credit history. You need at least 6 months to 1 year of credit history to have a credit score. Even though this ‘No Credit Score’ issue must be bothering you, there are things you can do to build a credit score.
1. Apply for a Credit Card or a Loan using your Savings Account
Using your savings account, you can apply for a loan in the bank you already hold an account in. As your bank already knows your account history and credentials, it makes easier for them to trust you and hence they will grant you a loan or a credit card easily.
2. Apply for a secured loan/credit card
Another option would be to apply for a loan or credit card. When it comes to secured loans, banks generally grant the amount at higher interest rates against a term deposit. Taking such loans can help the credit bureau to get enough data to build a credit history and ultimately to build your credit score.
3. Use your FD to get a Credit Card
Another good way of building your credit score is to get a Credit Card against your FD (Fixed Deposit). The bank holds a low risk in giving a credit card against an FD as the bank has your FD as collateral. So, you don’t have to worry if you have no CIBIL Score. You can follow the above things to start building your credit score. You can visit Finserv MARKETS to know more about building your cibil score.