cibil score

Seven things to avoid to save your CIBIL Score

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CIBIL Score: CREDIT SCORE determines your credit goodness and helps a loaner to decide if you qualify for a loan or a MasterCard. As per CIBIL, credit score ranges from three hundred to 900, and people with a score of a minimum of 750 points, get quicker loan approvals.

A credit score features a direct impact on your monetary life. A higher credit score suggests a lower risk of default and the other way around. Below square measure seven factors that will impact your credit score:

1. Do not miss the due dates: Missing the date of your MasterCard bill, not paying equated monthly instalments (EMIs) on time, features a negative impact on your credit history. even though you have got incomprehensible one payment or EMI, it’ll be mirrored within the report.

If your credit score is low as a result of you do not pay your bills on time, be prompt together with your payments. Once you create a habit, it’ll take a minimum of half a dozen to eight months for your credit history to enhance.

However, the smart factory is that currently, besides loans or EMIs solely MasterCard bills square measure thought-about whereas evaluating credit history and different house bills aren’t taken into thought.

2. Maintain a healthy credit use quantitative relation Credit use quantitative relations are often outlined as what proportion credit is availed from the given credit limit. it’s calculated in share terms.

3. do not increase your MasterCard limit of Although Associate in Nursing increased limit on your MasterCard offers you the flexibleness of availing additional debt, this will affect your credit score if not used judiciously.

4. confirm all of your recent loans square measure ‘closed’ and not ‘settled’. Any default recent loans are mirrored within the credit history. A default lowers your credit score and credit goodness.

5. you need to check your credit report of throughout the year to make sure that it doesn’t have any errors which will affect your credit score.

6. scan your credit report initial before applying for a loan. As mentioned on top of, a credit score determines the credit risk. So, if you have got an occasional credit score, a bank may charge you a higher rate for the loan or perhaps reject your application.

7. Not having a credit history :This may return as a surprise to several folks however not having a credit history features a negative impact on your credit score. Your credit score is decided on the premise of your loan reimbursement history, credit behavior, credit use limit alongside different factors.

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How does the CIBIL Score Affects Your Credibility?

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Thinking of buying a house or a car? The mere thought of applying for the loan is enough to induce stress as in spite of having all the required documents; there’s always a chance of your loan application getting rejected.

It’s true that we can’t provide any guarantee for your loan application acceptance but we can certainly offer you an insight on one of the fundamental component that defines your credibility- CBIL score.

What is a CIBIL Score?

CIBIL (Credit Bureau India Limited) score is a three digit score that plays a pivotal role in determining your credibility. Derived from CIR (Credit Information Report), your CBIL score is determined by taking your entire credit history in consideration. In simple terms, CIBIL score helps the lender to know whether you are capable enough to repay the loan.

How will the CIBIL score influence my loan application?

As the CIBIL score forms the authentic source to reflect your credibility, whenever a lender receives your loan application he refers to your credit score. A score of less than 300 can increase the chances of loan rejection whereas a score between 300-600 or above 900 can process your application to the next level.

Post your credit score check, a review of your recent credit purchases, payment history, outstanding payments, earlier loan repayment durations, etc., is undertaken. Although sanctioning of loan is subjective in nature, the component of CIBIL score certainly influences the decision of concerned money lending institutions.

How do you manage your CIBIL score?

If your CIBIL score is less than 300, here’s how you can improve your CIBIL score:

  • Avoid overuse of credit: Use your credit facility only when you actually need it, as over exploitation of credit simply creates a false impression on your lender.
  • Clear your dues: Ensure that you act responsibly and clear all your outstanding EMIs and bills on time as the timely clearance of your bill will reflect a healthy loan repaying capacity.
  • Periodic check: Through a periodic review of your CIR (Credit Information Report), you can always rectify your errors in case of any.
  • Manage your accounts: It is advisable to have only one or at the most two accounts, as the presence of multiple accounts often makes it difficult for efficient management.
  • Seek help: If you are finding it difficult to manage your CIBIL score than always seek professional help as that would simplify your credit management.

Having said that always remember that CIBIL score affects your credibility but it’s not the only factor to affect your credibility. Often there have been instances wherein in spite of having a good CIBIL score, the loan applications have been rejected by banks. Also, this does not mean you neglect your CIBIL score, especially when you are applying for a loan.

Besides, having a healthy CIBIL score can also bring in an advantage of low interest rate from your lender, so next time before you apply for a loan always check your CIBIL score to avoid any unforeseen surprises.

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