Before offer you loan or credit card, Bank should know about your financial history and credit worthiness. CIBIL helps banks to measure the individual’s capability and probability of repaying the loan. CIBIL (Credit Information Bureau (India) Limited) is Credit Information Company (CIC) that provides credit related services to its members nationwide. CIBIL scores are very important when it comes to availing credit, especially loan approvals. The banks check your CIBIL score or credit score through CIBIL. A CIBIL score helps determine your creditworthiness which in turn will help you avail loans faster and easier. Here would discuss 4 Ways to get loan and credit cards approval immediately by improving credit score.
A poor CIBIL score can increase your financial problems and make it difficult to access credit, whether as a loan or credit card. The good news is that it is possible to improve your score – you need to stop worrying about the problem, and begin to take concrete steps right away to improve your score. CIBIL is one of the four authorized credit bureaus in India which provide a credit score, the others being Equifax, Experian and CRIF High Mark.
The 4 ways to improve your credit score for faster loan and credit card approval
Get your credit score and validate it:
Generate your credit score free in CIBIL website. While you might think you have a good credit history, there might be certain reporting errors that make your score low. For example, if you have paid off your personal loan in full and closed the account, but it not updated in the credit history. By correcting these errors, you can put an immediate stop to a negative effect on your score. Similarly, it is also useful to check for any suspicious activity (e.g. a loan that you have not taken) which could be fraud. Identify such as fraud financial activity in your name by credit report.
Do not miss your loan and credit card payment:
Your loan repayment is a very important factor in calculating your credit score. Your track record of loan and credit card payments can make up almost one third of your score. Even a single late payment can adversely affect your CIBIL score. Never delay or miss your credit card and loan payment. Pay bill on time and in full, you will see an immediate effect on your credit score. You should aim to make your payments must be made at least 3 working days before the due date.
Do not utilize more than 50% credit limit :
One of the easiest way to improve your credit score is to avoid utilising your credit card to its full limit. Limit your monthly credit card bill to not more than 50% of your limit. E.g. If you have a credit limit of Rs. 1,00,000 a month, make sure you do not exceed monthly expenses of Rs. 50,000. Using more than 50% of your card limit signifies that you might have issues with spending discipline and that you might not be able to keep aside enough to repay your debt obligations. This causes your score to drop.
Avoid multiple loan and credit card applications :
If you have too many enquiries for loan and credit card, it would heavily impact your credit score. Imagine that you have made a credit card enquiry, a personal loan enquiry and a home loan enquiry within months. It shows that you are credit hungry and looking for multiple sources of credit. One way you can prevent a drop in your score is to avoid making several new applications for credit within a short time frame.
Moreover, it takes 4-12 months to repair your credit score, depending on your individual situation. Identify the issue earlier and get it fixed immediately and it would help you to achieve your credit goal. Happy investing 🙂