What is CIBIL credit score?
The CIBIL credit score is an important term used for determining one’s eligibility for loan approval. The scores are based on your previous credits and it includes the past credit along with the payment patterns with relation to the credits. A high score means that your credit is worthy enough for approval of any loan and a low score means less creditworthiness. Achieving low score will tag you as a risky borrower and lenders will hesitate to approve your loan.
There are no specified good or bad credit score, but in general, the lenders will provide you a loan if your credit score is 700. If you’re applying for consumer loan which is regarded as an unsecured loan, you likely need to score more than 750 before applying to the lenders for the loan.
How can you maintain and improve your credit score?
There are lots of methods which you can follow to maintain and improve your credit score.
1. Checking the credit report:
You should check your credit report regularly because it will help you determining two critical things. The first is the loan or the certain credit card where the delayed payments and the defaults will show, which have lowered your score. The second one is that it will provide you with a detailed analysis of the recorded events related to your credit score.
2. If rejected several times, stop applying
If your loan application is rejected for several times, every information regarding the loan will be recorded on the credit report. So, when you apply for a loan in any other bank, immediately your low credit score will be noticed and the bank may again reject your loan application. Under these circumstances, you should wait for your score to improve and only after that, you should apply for loans.
3. Give fewer applications
Another important reason to avoid too many loans is that every time you apply for a loan, the bank will enquire your CIBIL score and that enquiry will be included in the report. This has two drawbacks, the first one being that you show a credit want behaviour and the second one being that your CIBIL scores lowers even you’ve every intention of returning the loan on time.