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News India Live, Digital Desk: To take your dream home, buy a new car, to bear the expenses of children’s education or increase your business – loan has become an important part of our life. But, has it ever happened that banks or financial institutions refuse to give you a loan, and the biggest reason for this is your ‘CIBIL score’ (Cibil score)This is not just a number, but a report card of your financial honesty, on which banks blindly trust.
Don’t panic! If your CIBIL score is low, it does not mean that all your expectations are over. This can be improved! Come, let’s first understand what is the CIBIL score and then you will know how to fix it, so that your loan dreams can come true.
What is this ‘CIBIL score’? Your financial credit measure
The CIBIL score has a three -digit number between 300 and 900. This is all your previous financial activities, such as how many loans you have taken, have you paid their installments on time, how the credit card bill has been paid, all of them have an account. Banks and loans giving companies decide how safe it is to give you a loan.
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Good CIBIL Score (750+): This means that you are a reliable customer. You will get a loan easily, and perhaps even at better interest rates.
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Low CIBIL score (550-650): It shows that you have delayed payment in the past or your financial habits have been irregular. In such a situation, banks hesitate to give loans.
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Very low CIBIL score (300-550): This is a red flag. In this situation it is almost impossible to get a loan.
Why is your CIBIL score low? These are common mistakes:
If your CIBIL score is low, there may be some main reasons for this:
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Delay in paying installments or bills: The biggest reason for not paying the bill of loan EMI (monthly installment) or credit card on time is the biggest reason.
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More use of credit limit: Complete or most of your credit card limit to use every month.
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Several loan applications simultaneously: Applying for loans in many banks repeatedly or simultaneously, which makes you need a lot of money.
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Loan Default: Do not pay a loan at all or settle it.
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Lack of credit history: You have never taken any loan or credit card, so that you did not have any credit history.
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Wrong report: Any incorrect information has been recorded in your CIBIL report.
So what to do now? In this way improve your CIBIL score, get the path of loan:
No need to panic! Once the damaged CIBIL score can be improved. It takes some time and patience, but it is not impossible:
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Pay on time: This is the most important step. Always pay all your loan installments and credit card bills on time. If you have missed the previous payment, fix them immediately.
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Use credit cards less: Do not use your credit limit more than 30%. If your limit is ₹ 1 lakh, then try not to exceed ₹ 30,000.
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Check your CIBIL report: Download your CIBIL report for free at least once a year and read it carefully. If there is any mistake, get it fixed immediately.
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Do not apply loans again and again: Unless it is very important, do not apply for a new loan or credit card. Every application negatively affects your score.
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Do not close old credit accounts: If you have an old credit card or loan account, which you no longer use, do not stop it immediately. Long credit history is good for your score.
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Take a small loan and pay: If you have no credit history, take a small loan (such as to buy a gadget) or a secured credit card (in which you deposit money in the bank) and repay it on time. This will start to become your credit history.
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Be patient: The CIBIL score does not improve in a month or two. It can take 6 months to 1 year or more. This is possible only with regular and disciplined financial habits.
Remember, a good CIBIL score does not just help to get a loan, but it is also a proof of your financial health. This leads you to better interest rates, high loan amount and financial stability. So pay attention to your financial habits from today and make your CIBIL score strong!
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