The benefits of a high CIBIL score
How creditworthy you are is determined by your CIBIL score. The Reserve Bank of India (RBI) has authorised the Credit Information Bureau (India) Ltd., also known as CIBIL, to generate this score for a person. An actual CIBIL score falls between 300 to 900, with 900 signifying the highest level of creditworthiness. Your credit score influences how likely you are to be approved for a personal loan.
Your CIBIL score is influenced by the way you handled paying off previous debt. You may maintain a high credit score by making on-time payments on all your debts, including credit card bills, loan EMIs, and other unpaid obligations. On the other hand, failing to make a loan payment lowers your credit score.
A personal loan can be helpful when you’re short on money. However, you must pass the lender’s stringent requirements before the loan may be accepted. To get a general sense of how much money you can borrow, utilise the personal loan eligibility checker. One of the first things your application will need to get through is your credit, or CIBIL, score. But what exactly qualifies as a good CIBIL score? Are people with low CIBIL scores ineligible for personal loans?
With some work, you could be able to get a personal loan even if it might be more challenging if your CIBIL score is low.
Getting eligible for loan with a low CIBIL score:
Even though it can be challenging, you can still get an immediate loan even if you have negative credit if you follow these instructions:
- Present income documentation to support loan repayments
Despite having bad credit, the lender might still evaluate your loan application if you get a raise at work or add another source of income. Your chances of getting a loan approved also increase if you can show that you have a reliable employment with a steady income. You need to be informed that there’s a chance your interest rate will increase.
- Consider taking out a brief personal loan.
With a low CIBIL score and a sizable personal loan request, your lender might consider you to be a high-risk candidate. According to the lender, you have a higher likelihood of missing a loan payment. The lender might be more inclined to grant the request if the personal loan is for a smaller amount. In addition, paying back a smaller amount will be considerably simpler.
- Obtain a guarantor or submit a combined loan application.
Having a co-applicant or guarantor with a good credit score might speed up the process of getting a personal loan if your CIBIL score is low. Make sure the KYC procedures are carried out and authorised signatures are obtained on all necessary documents.
When a lender finds a co-applicant or guarantor on your loan application with a decent CIBIL score, it undoubtedly helps you get a better deal.
- Correct Credit Report Inaccuracies
With a poor CIBIL score, you may find it difficult to obtain a personal loan. However, there is a chance that your credit report contains mistakes or misreporting.
- If your credit record displays a NA or NH, ask your lender to take your case into account.
A credit period that was inactive in the previous 36 months or the lack of a credit period during that time is indicated by a NA or NH on your credit report. As a result, your CIBIL report won’t contain any information on your credit score.
Tell your potential lender why there has been a period of credit inactivity. It’s likely that the loan will have a higher interest rate applied to it.
Even though following these procedures can help you get an immediate loan despite having bad credit, you’ll still need enough cash to make the repayments on time. If you do, your CIBIL rating will be even lower.
A personal loan requires a minimum CIBIL score of between 720 and 750. If you have a good credit score, lenders will easily approve your application for a personal loan. They might also provide you with the loan amount you want at a low interest rate. Whereas your credit score is between 650 and 749, lenders may decide to give you a house loan after learning more about your other financial circumstances. However, the minimum CIBIL score necessary for a home loan is often 650. Scores between 550 and 649 are considered ordinary and need improvement. However, a 750 minimum CIBIL score is required for an instant approval on an unsecured personal loan.
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