Before sanctioning any loans or advances, financial institutions carry out several checks on applicants’ credit profile to ensure they can repay the loan liability timely. Among many such determinants, CIBIL score is one of the vital criteria that need to be fulfilled. This parameter signifies individuals’ financial record, repayment history, and other financial behaviours.
A 3-digit rating, this score can range
between 300 and 900, where a score of above 750 is considered as excellent,
making the holder eligible for most credit options. So, applicants must view
their credit score before applying for a loan.
They can simply check CIBIL score without login on select online platforms to proceed for availing a debt
tool that matches their score. However, if the rating does not qualify a loan
product’s threshold requirement, applicants can adopt the following practices
that can help improve this score.
Steps to take for credit score improvement
●
Timely repayment to avoid default
The primary and most effective way to adopt
for credit score enhancement is to make timely repayment. Whether it’s their
credit card’s monthly bill or loan EMI, individuals should be careful about the
due date. Repetitive defaults or late payments can prove damaging to the score
as well as one’s credit profile.
To counter such occurrences, individuals can
opt for standing instructions for timely payments so that they never miss the
due dates. However, such initiatives may not reflect the result instantly, as
credit score build-up can take time. Thus, after a significant period has
passed, individuals can check CIBIL score without login for a positive impact.
●
Maintain an ideal credit utilisation ratio
Credit utilisation ratio suggests the total
amount that borrowers have already spent out of the entire credit amount
available to them. The closer individuals go to the maximum limit, the more it
can hurt their score. Thus, they are always advised to keep this ratio within
30% of the threshold.
For instance, if borrowers obtain a credit
limit of Rs.30,000, they must not spend any more than Rs.9,000 for a given
duration to build a promising credit report and the score. From a lenders’
perspective, when borrowers exceed the limit of 30%, it implies reckless use of
credit that may lead to default and reduced repayment capacity, thus hurting
the score.
●
Clear all existing debts
When offering a loan, financiers prefer
responsible credit behaviour that prioritises repayment. So, applicants with
multiple loan accounts and credit cards can organise their finance and clear
off all the dues as soon as possible. Individuals can utilise their salary
increments, bonus, incentives, investment returns, and all other additional
earnings to prepay the outstanding credit.
This way, they can save a significant amount
from paying towards the interest as well.
●
Create a prolonged credit history
Utilising credit for an extended period with
zero default or late payment record can bear a positive impact on one’s credit
score. It reflects that a borrower can repay all the dues in time as well, thus
creating a credit-responsible profile for him/her. So, if individuals hold an
old credit card or loan account, they must keep on utilising them with
organised behaviour and make timely payments towards the dues.
●
Maintain a balanced mix of credit
Reaching an excellent credit score without
borrowing different credit instruments is challenging. However, obtaining only
a single type of credit line does not help build a reliable credit profile as
well. So, individuals should maintain a balanced mix of both unsecured and
secured loans and repay timely. It would help create the impression that they
can manage all credit products efficiently.
●
Check reports for accuracy
Applicants should also view their credit
report at regular intervals for accuracy. However, at first, they should know
how to check CIBIL score for all recent updates. Any small error can hurt their
credit profile, and consequently their eligibility for credit options.
Also, as checking the eligibility criteria is
a vital part of the personal loan application process, individuals should also compare all the available options before
selecting one. They should look for lenders such as Bajaj Finserv who offer
personal loans at attractive interest rates.
Moreover, with improved CIBIL score for
personal loans, borrowers can secure this advanced facility at better terms.
Also, this financial institution brings
pre-approved offers that can assist applicants in obtaining a loan with minimum
hassle and time. The offer is available on other credit products as well, like
business loans and personal loans. Borrowers can look for their pre-approved
offer by entering their mobile number and name.
So, other than the above-mentioned things individuals can do to improve
personal credit score, they should also avoid multiple loan applications at one
time. Each application invites hard enquiry about their financial profile,
which is not considered a good indicator for borrower profile. So, along with
checking CIBIL score without login from time to time, they must also follow all
these methods for improvements.
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